Yahoo Finance Analysts Are Optimistic We'll See A Profit From D2L Inc. (TSE:DTOL)
D2L Inc. (TSE:DTOL) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. D2L Inc. cloud-based learning software for higher education institutions, kindergarten to grade 12 schools and districts, and private sector enterprises in Canada, the United States, and rest of world. The CA$501m market-cap company posted a loss in its most recent financial year of US$3.5m and a latest trailing-twelve-month loss of US$4.1m leading to an even wider gap between loss and breakeven. The most pressing concern for investors is D2L's path to profitability – when will it breakeven? Below we will provide a high-level summary of the industry analysts’ expectations for the company.
View our latest analysis for D2L
D2L is bordering on breakeven, according to the 8 Canadian Consumer Services analysts. They anticipate the company to incur a final loss in 2024, before generating positive profits of US$9.3m in 2025. So, the company is predicted to breakeven approximately a year from now or less! At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 121%, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.
Underlying developments driving D2L's growth isn’t the focus of this broad overview, but, take into account that typically a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.
One thing we’d like to point out is that D2L has no debt on its balance sheet, which is rare for a loss-making growth company, which usually has a high level of debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.
Next Steps:
This article is not intended to be a comprehensive analysis on D2L, so if you are interested in understanding the company at a deeper level, take a look at D2L's company page on Simply Wall St. We've also put together a list of key aspects you should look at:
Valuation: What is D2L worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether D2L is currently mispriced by the market.
Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on D2L’s board and the CEO’s background.
Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
