Instructure (INST) CEO Presentation Standing Room Only at Needham Growth Conference

Needham & Company commented on Instructure, Inc. (NYSE: INST) after the CEO presented at Day 1 of the Needham Growth Conference.

Analyst Michael Huang noted CEO Josh Coates presented to a full room with standing room only.

"CEO Josh Coates presented to a full room with standing room only. Tesla, Expedia and Yankee Candle are a sampling of corporate traction. Accumulating market share very rapidly in higher ed, the company states that the main reason is that the software is terrible. Trends for Instructure’s type of a mobile-first user-friendly LMS get a tailwind as millennials are a greater portion of the workforce (currently 1/3 in corporate vs. almost 100% of education). International market is looking at the US for how tech has been implemented and are now doing the same. INST is going to continue developing software on AWS, and the company has been closing 2 new contracts per calendar day on average."

"Path to growth: only 15% penetrated in US higher ed domestic and taking share from blackboard, K-12 is a greenfield market because there wasn’t any cloud software LMS for K12 until recently. Corporate opportunity is fragmented and mostly evenly split between greenfield and rip and replace; even cornerstone only has single digits here. The company has plans in place to moderate S&M spend soon, which should drive operating margin gains and decreased spend offset by substantial momentum. Gross margin growth should come from lower AWS costs (better pricing at higher tiers and better utilization), around half of COGS is AWS, and customer support efficiencies. S&M efficiencies will come from quota expansion, early quota was $1MM and it's now close to $2MM without having to pay them twice as much. G&A won’t expand much. No big moves in R&D, will moderate over time."

The firm maintained a Buy rating and price target of $25.00

For an analyst ratings summary and ratings history on Instructure, Inc. click here. For more ratings news on Instructure, Inc. click here.

Shares of Instructure, Inc. closed at $20.60 yesterday.

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