Instructure Holdings: A Strong Buy on Surging Revenue and Market Discount

Analyst Joseph Vruwink of Robert W. Baird maintained a Buy rating on Instructure Holdings (INST – Research Report), retaining the price target of $29.00.

Joseph Vruwink’s rating is based on a robust set of financial indicators and market performance of Instructure Holdings. The company’s revenue surged by 21% year-over-year, with an organic growth of 7%, slightly surpassing expectations. Furthermore, Instructure has demonstrated significant efficiency leading to an EBITDA margin increase from 38% to 42%, exceeding consensus estimates. This growth in revenue and margins, combined with an upbeat forecast for FY24, signals a strong financial position and potential for increased profitability, contributing to the Outperform rating.
Moreover, Vruwink sees potential upside in the stock, noting that it trades at a ~30% discount to the S&P, which could represent an attractive entry point for investors. The company’s focus on growth initiatives and successful execution of financial targets, including a projected organic growth rate of 9-11% per year, positions it well for future success. Despite skepticism regarding demand from higher education markets, Vruwink is encouraged by Instructure’s positive start to the fiscal year and its ability to meet or exceed the investor day parameters, further justifying the Buy recommendation.

Vruwink covers the Technology sector, focusing on stocks such as Autodesk, Cadence Design, and PTC. According to TipRanks, Vruwink has an average return of 8.7% and a 61.06% success rate on recommended stocks.

In another report released yesterday, Needham also reiterated a Buy rating on the stock with a $32.00 price target.

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Instructure Holdings (INST) Company Description:

Instructure Holdings Inc is an education technology company dedicated towards helping everyone learn together. it amplify the power of teaching and elevate the learning process, leading to improved student outcomes. The company supports more than 30 million educators and learners at more than 6,000 organizations around the world.