Poor profit outlook makes us wary

Article Excerpt

D2L INC. $14 is a hold. The company (Toronto symbol DTOL; Manufacturing Sector; Shares outstanding: 52.9 million; Market cap: $740.6 million; No dividend paid; Takeover Target Rating: Lowest; www.d2l.com), formerly called Desire2Learn, makes cloud-based educational software. It’s main product, Brightspace, lets teachers create lessons using a variety of video and other interactive content. It also helps track the progress of students and analyze the effectiveness of teachers. On October 14, 2021, the company completed an IPO of 8.8 million subordinate voting shares (1 vote per share) at $17 a share. Insiders control D2L through multiple voting shares (10 votes per share). The company continues to sign up new clients, including British Columbia’s Ministry of Education and the York University School of Continuing Studies, partly because COVID-19 has forced schools to offer remote learning alternatives. However, this is an increasingly competitive field, and D2L is unlikely to generate profits for some time. D2L is a hold. hold…