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Instructure: Risky But Promising

|Includes: Instructure (INST)

Instructure provides cloud-based learning management platform for academic institutions and companies. The company went public a week ago and we didn't see any significant jumps of falls. Although the stock grew up from initial $15.90 to $18.75 (almost +20%).

In order to check the financial and operating metrics I looked into the company's prospectus. I underlined the following interesting things for me:

  • The company itself is growing, revenue increased 68% for nine months ended September 2015 compared to the same period last year;
  • The company changed the structure of costs. For example, Sales and marketing costs grew up from 72.95% of revenue (September 2014) to 74.53% (September 2015). Research and development costs declined from 39.8% of revenue to 33.9%. As we can see, the operating expenses were less if we compare them as % of revenue. This is a good sign, especially for the small-cap company. It means that Instructure is going to increase the product marginality and, therefore, get the positive EBITDA and EBIT;

Check out more information about Istructure in my blog here: