INST Stock Is Winning with Its Learning Management Platform

Instructure Stock
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Instructure Stock Rides High on Growing Learning Markets Demand

Today’s stock is related to one of our favorite investment strategies: investing in “picks and shovels” stocks that provide solutions in a rising technology trend. One of these current trends is learning management systems (LMS), which have completely changed the way learning takes place today. Many players have come in to take advantage of this trend, but only a few will thrive.

A case in point is Instructure Inc (NYSE:INST), which provides a cloud-based learning management platform to academic institutions and companies across the world. The educational technology company builds the “Canvas” application for the education market and the “Bridge” application for the corporate market.

With the help of Instructure’s products, clients are able to develop, deliver, and manage face-to-face and online learning experiences.

Through its cloud-based learning management platform, Instructure has connected millions of teachers and learners at more than 3,000 educational institutions and corporations around the world. The company delivers applications through a Software-as-a-Service (SaaS) business model.

Instructure’s platform combines powerful and easy-to-use functionality with the reliability, scalability, and support required by its customers. The rising demand for the company’s products could result in improving financial performance and soaring INST stock prices.

The company believes that the market for cloud-based learning, assessment, and performance applications remains underserved.

The LMS market is expected to reach almost $15.4 billion by 2023, representing a compound annual growth rate (CAGR) of 20% from 2017 to 2023. The global LMS market is about to grow significantly on account of the rise in Internet and communication technology (ICT) expenditures by governments of various developed and developing countries. (Source: “Learning Management System (LMS) Market by Deployment Model, User Type, and Industry Vertical: Global Opportunity Analysis and Industry Forecast, 2017-2023,” Allied Market Research, last accessed March 19, 2018.)

Although the LMS market is quite competitive, it is big and growing. Instructure is in a good position to take advantage of the changing landscape, which makes the future bright for Instructure stock.

Quality education and constant learning are vital in today’s dynamic and knowledge-driven economy. The organizations working toward this goal will be the ones that can compete and succeed in the future.

Academic institutions need an interactive learning environment to help students reach their maximum potential. And companies need to deliver continuous learning and feedback to attract, develop, and promote the best people.

Not only this, these kinds of organizations require actionable data in order to measure, track, and improve individual and organizational performance. Instructure products help them achieve this, which bodes well for INST stock.

The company recently filed its annual report. Instructure had a strong finish to the year, with quarterly revenue growing by 39% and annual revenue growing by 43% for the year. Instructure also announced its fourth-quarter and full-year financial results last month.

CEO Josh Coates said, “During the year we further drove innovation with the introduction of new modules for both Canvas and Bridge.” (Source: “Instructure Reports Fourth Quarter And Full Year 2017 Financial Results,” Instructure Inc, February 12, 2018.)

As of December 31, 2017, Instructure had over 3,000 colleges, universities, school districts, and companies as customers in more than 60 countries.

Last November, the company made its first acquisition, Practicev XYZ, Inc., which provides video microlearning solutions. Instructure has also entered into a partnership with Paychex, Inc. (NASDAQ:PAYX), which allows the latter to offer Instructure’s LMS system “Bridge Learn” to their more than half a million clients, which have about six million users nationwide.

The rising optimism surrounding the company’s business growth has boosted Instructure stock, which has gone up by almost 80% in the last year. The following chart shows this phenomenal rise.

instructure stock chart

Chart courtesy of Stockcharts.com

The company continuing its international expansion should translate into more gains and higher INST stock prices.

Analyst Take

Instructure Inc is a leading educational technology company that makes software for the growing learning markets. The company’s vision is to help maximize people’s potential through technology. Given the way that Instructure has been executing its strategy, it appears that revenue growth could continue for a while, which means that Instructure stock could see higher returns.

Investors who believe in the potential of learning management in today’s technology-driven society might want to consider the opportunity in this picks-and-shovels stock.