BC Business
Thinkific Labs has lost close to a third of its value since its debut on the Toronto Stock Exchange at $13 in April. But the Vancouver company is still getting good grades on the operational side, executing its strategy and boosting revenues 65 percent in the third quarter compared to the same quarter a year earlier.
Thinkific COO Miranda Lievers and CEO Greg Smith
The stock: It hasn’t been a textbook launch on the public markets for online education platform Thinkific Labs (TSX:THNC), with the stock losing close to a third of its value since its debut on the Toronto Stock Exchange at $13 in April. But the Vancouver company is still getting good grades on the operational side, executing its strategy and boosting revenue 65 percent in the third quarter compared to the same quarter a year earlier.
The drivers: That growth, it’s worth noting, comes on top of a breakthrough performance in 2020, when Thinkific more than doubled its gross sales. The COVID-19 pandemic pushed teachers of everything from yoga to retail staff training to put their courses in the cloud, and Thinkific was there to help. This year, annual recurring revenue was up 56 percent year-over-year in Q3, while the number of paying clients (Thinkific also offers a free version to attract new customers) was up 43 percent.
READ MORE: Tech unicorn Thinkific moves to the head of the online learning class
The company lost US$10.7 million or US14¢ a share in Q3 on revenue of US$9.9 million, with the loss mostly coming from R&D and sales and marketing expenditures.
With its earnings release on November 8, Thinkific unveiled Thinkific Payments, an embedded payment processing tool that enables its customers—which it calls “creators”—to accept payments, manage payouts to bank accounts, process refunds and update banking and business information without having to use a third-party payment provider. Its strategy is to become an all-in-one operational application for online educators.
The stock closed at $10.80 on Tuesday, for a market capitalization around $800 million.
Word on the street: “Thinkific’s shares are attractive, and should be purchased on further weakness,” wrote CIBC Capital Markets analyst Todd Coupland, who rates the stock “outperformer” with an $18 price target.
Coming and going: West Vancouverbased Millennial Lithium (TSXV:ML) is in play, with downtown rival Lithium Americas Corp. (TSX:LAC) topping a bid from China’s Contemporary Amperex Technology Co. (SZ:300750) on November 1. Lithium Americas’ mostly share-based bid equates to around $460 million, or $4.70 per share, a substantial premium over Contemporary Amperex’s $3.85 cash offer, which would also require federal government approval.