fund manager Martin Mathieu comment Thinkific is a leading platform for creating, marketing, and selling courses, digital products, communities and learning experiences online.
The stock has performed exceptionally poorly since going public in April 2021, but the business is not doomed at all. Yes, growth has slowed, and the company hasn’t shown any meaningful profitability. However, my thesis was that we would see higher growth or improved profitability from now on.
Thinkific published decent third-quarter results, with revenue up 15% year-over-year and adjusted EBITDA up 26%. Like Illumin, the EBITDA margin was a little over 5% of revenues, and I also think there’s a lot of room for improvement in this area.
The results were pretty much in line with analyst expectations. The stock spiked 20% two days after the release before settling back down. Again, the market will probably want to see another strong quarter or two and gain confidence in the growth trajectory before rewarding Thinkific with a better valuation multiple. In the meantime, the stock continues to trade at an EV/Revenue multiple of 1.5x, significantly below recent M&A transactions.
Stock price when profiled (Oct 30): $2.50
Closing stock price yesterday (Nov 26): $3.00
Return: + 20%