THNC: Share Repurchases And Market Perform Rating Will Support Future Upside

Analysts have trimmed their price target on Thinkific Labs to C$3.01 from C$3.05, citing slightly lower profit margin assumptions and a modestly higher future P/E. This adjustment is consistent with a recent downgrade to Market Perform and a C$3 target from Street research.

Analyst Commentary

Bullish Takeaways

Bullish analysts view the C$3.01 target and C$3 price reference as a sign that, even after more conservative assumptions, the stock is still aligned with what they see as fair value for the current business profile.
The slightly higher future P/E used in the revised work suggests some confidence that the company can support a valuation tied to ongoing execution, rather than requiring a deep discount.
The modest adjustment in profit margin assumptions is seen by bullish analysts as a fine tuning exercise instead of a signal of a major shift in the underlying thesis.
The Market Perform stance, paired with a target close to earlier expectations, indicates that bullish analysts still see room for the company to justify its valuation if it delivers on operational goals.

Bearish Takeaways

Bearish analysts interpret the downgrade to Market Perform as a sign that the risk or uncertainty around execution is high enough that they are less comfortable with a more aggressive rating.
The trim in the target from C$3.05 to C$3.01, alongside a C$3 target from Street research, is viewed as a signal that upside may be more limited relative to earlier expectations.
Lower profit margin assumptions point to caution around the company’s ability to sustain or expand profitability at the pace previously modeled.
The use of a higher future P/E is viewed by bearish analysts as increasing reliance on the market being willing to support a richer multiple, which can add valuation risk if execution does not line up with these assumptions.

What's in the News

Thinkific Labs Inc. announced a normal course issuer bid allowing the company to repurchase up to 3,395,023 subordinate voting shares, or 5% of the 67,900,467 shares outstanding as of November 5, 2025. The bid will expire on November 18, 2026 unless completed or terminated earlier (Key Developments).
The company reported that from July 1, 2025 to September 30, 2025 it repurchased 374,366 shares, representing 0.55% of shares, for $0.47 million. This brought total buybacks under the November 7, 2024 program to 970,946 shares, or 1.42%, for $1.73 million (Key Developments).
From October 1, 2025 to November 11, 2025, Thinkific Labs repurchased an additional 291,170 shares, or 0.43%, for $0.44 million. This took cumulative repurchases under the November 7, 2024 buyback to 1,262,116 shares, or 1.85%, for $2.17 million (Key Developments).
Management issued earnings guidance for the fourth quarter of 2025, indicating expected revenue in the range of $18.4 million to $18.7 million (Key Developments).

Valuation Changes

Fair Value Estimate edged down slightly from CA$3.05 to CA$3.01.
Discount Rate moved marginally lower from 7.51% to 7.50%, indicating only a very small change in the risk input used.
Revenue Growth Assumption was held effectively flat at about 6.06%.
Net Profit Margin was reduced from about 12.08% to 10.76%, reflecting more conservative profitability expectations.
Future P/E increased from 18.00x to 19.77x, pointing to a higher valuation multiple being applied in the updated work.

Upmarket strategy and product innovation, including AI and B2B features, are driving improved growth, customer retention, and enhanced revenue quality.
Strengthening commerce solutions and financial position enables ongoing investment and positions the company to capitalize on digital transformation in online learning.
Thinkific's upmarket shift boosts potential for higher-value customers but faces elevated churn, increased costs, leadership instability, tougher competition, and commerce revenue growth challenges.

Catalysts

About Thinkific Labs

Engages in the development, marketing, and support management of cloud-based platform in Canada, the United States, and internationally.What are the underlying business or industry changes driving this perspective?

The company is executing a strategic move upmarket, targeting larger businesses that require scalable online education and commerce solutions-this shift is expected to drive higher ARPU, increase enterprise contract sizes, and improve revenue growth as the business mix evolves.
Deep integration of artificial intelligence into both customer-facing features and internal operations is accelerating product development and enabling personalized, data-driven learning experiences-supporting product differentiation and enhancing customer retention, which is positive for recurring revenue and net margins.
Sustained platform investment in B2B selling tools, subscriptions, and community-driven learning addresses the mainstreaming of lifelong learning and the growing demand for flexible workforce education-catalyzing incremental ARR and expanding TAM.
Native commerce capabilities and growing adoption of Thinkific Payments, especially as feature sets mature for high-GMV customers, position the company to capture a higher take rate and increase transactional revenue as customers scale, thereby supporting overall top-line growth and improving margin mix.
The company's strong balance sheet, positive cash flow from operations, and resumed share repurchases provide financial flexibility to invest in product innovation and capitalize on industry-wide digital transformation trends-potentially improving both earnings quality and net margins over the long term.

Thinkific Labs Earnings and Revenue Growth

Thinkific Labs Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Thinkific Labs's revenue will grow by 8.1% annually over the next 3 years.
Analysts are not forecasting that Thinkific Labs will become profitable in next 3 years. To represent the Analyst Price Target as a Future PE Valuation we will estimate Thinkific Labs's profit margin will increase from 1.0% to the average CA Software industry of 11.6% in 3 years.
If Thinkific Labs's profit margin were to converge on the industry average, you could expect earnings to reach $10.4 million (and earnings per share of $0.16) by about September 2028, up from $675.0 thousand today. The analysts are largely in agreement about this estimate.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 20.1x on those 2028 earnings, down from 138.8x today. This future PE is lower than the current PE for the CA Software industry at 66.1x.
Analysts expect the number of shares outstanding to decline by 0.35% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 7.49%, as per the Simply Wall St company report.

Thinkific Labs Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Thinkific's transition upmarket is expected to drive higher ARPU and more stable, higher-value customers, but management repeatedly highlighted the expectation of increased churn among existing SMB and self-serve customers through at least the balance of this year; this elevated churn risks offsetting Plus growth in the near-to-medium term, potentially slowing overall revenue growth and ARR acceleration.
The company is investing heavily in new product features, AI integration, and enhanced customer support for larger clients, committing to increased OpEx and R&D spend ahead of anticipated revenue uplift; if upmarket customer acquisition does not ramp as expected, these higher costs could compress net margins and delay sustainable EBITDA expansion.
Recent disruption and turnover within the sales organization, particularly in senior Plus sales leadership, created a temporary slowdown in onboarding and productivity ramp of new account executives and lengthened sales cycles; continued instability or misexecution during this transition could further dampen revenue performance, ARR, and retention metrics in the near term.
Moving upmarket introduces Thinkific to a different competitive landscape, now going head-to-head with larger, established LMS and EdTech players with deep enterprise focus; if Thinkific's differentiation (AI, commerce, community) or product development fails to keep pace, there is risk of customer attrition or price compression, impacting revenue growth and ARPU.
The text highlights that commerce revenue is becoming increasingly important to Thinkific's growth strategy, yet GMV was flat year-over-year and down sequentially due to both seasonality and cautious management outlook; reliance on GMV-driven customers exposes Thinkific to macroeconomic volatility, sector-specific slowdowns, or increased competition in digital payments-creating earnings uncertainty and potential revenue growth headwinds.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of CA$3.461 for Thinkific Labs based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of CA$5.01, and the most bearish reporting a price target of just CA$2.5.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $89.3 million, earnings will come to $10.4 million, and it would be trading on a PE ratio of 20.1x, assuming you use a discount rate of 7.5%.
Given the current share price of CA$1.9, the analyst price target of CA$3.46 is 45.1% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

AI Integration And Upmarket Shift Will Empower Digital Education