RBC Capital Markets updated its financial outlook for D2L Inc. (DTOL: CN), increasing the price target to Cdn$16.00, up from the previous Cdn$15.00. The firm kept its Outperform rating on the company's stock.
The adjustment follows D2L's fiscal second-quarter performance, which saw profitability reach the second-highest level in the company's history, surpassing expectations.
RBC Capital's commentary highlighted the company's strong results, noting the potential for further margin expansion as indicated by D2L's revised FY25 guidance.
The analyst pointed out that D2L's second-quarter revenue was aligned with both RBC Capital and consensus estimates. The firm expressed confidence in D2L's prospects for sustained low-double-digit growth.
The outlook is supported by the company's market share gains, the rebound in the educational technology (EdTech) market, and the introduction of new products.
RBC Capital emphasized the attractiveness of D2L's stock due to its discounted valuation. The firm anticipates a significant increase in the company's adjusted earnings per share (EPS), forecasting a 51% year-over-year growth from the calendar year 2024 to 2025.
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