INST

Instructure Inc

TMT


Presented:06/24/2019
Price:$40.75
Cap:$1.49B
Current Price:$23.52
Cap:$3.44B

Presented

Date06/24/2019
Price$40.75
Market Cap$1.49B
Ent Value$1.64B
P/E RatioN/A
Book Value$4.02
Div Yield0%
Shares O/S36.58M
Ave Daily Vol349,805
Short Int11.78%

Current

Price$23.52
Market Cap$3.44B
Instructure, Inc. provides applications for learning, assessment, development and engagement. The firm develops, delivers, manages and tracks engaging academic and employee development programs. It operates in a single operating segment, cloud-based learning management, assessment and performance systems. The company was founded by Devlin Daley and Brian Whitmer in September 2008 and is headquartered in Salt Lake City, UT.

Publicly traded companies mentioned herein: Blackboard Inc (public debt), Cornerstone OnDemand Inc (CSOD), Instructure Inc (INST)

Highlights

The presenter is short shares of Instructure Inc (INST), an education technology provider. INST’s primary product is a SaaS offering called Canvas, which is used by universities and K-12 schools to upload and share documents, submit grades, and administer quizzes, among other similar functionalities. INST competes directly with Blackboard, and Canvas stole significant market share from 2013 – 2017 (>20%), causing its share prices to increase from their $16 IPO price to ~$40 currently. Although Canvas is now approximately even with Blackboard in terms of market share, the presenter views the product as ex-growth. Every university has an ed-tech product at this point, and the market is fully saturated. Meanwhile, most of INST’s revenue growth has come from taking market share from Blackboard, and the presenter is confident that Canvas has lost its competitive advantages. For these reasons, he considers INST overvalued at ~5.5x 2019 sales and sees downside of ~30% to $27 – $30 per share (~4x sales).

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Idea Discussion

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