Core Insights - Both Skillsoft (SKIL) and Duolingo (DUOL) are positioned in the digital education sector, focusing on online learning platforms that generate revenue through subscriptions and enterprise solutions. The shift towards remote work and app-based learning is driving demand for digital education [1] Skillsoft (SKIL) - Skillsoft aims to evolve into an AI-first skill-management organization, focusing on its Percipio platform to enhance the connection between learning and business performance [2] - The company is leveraging AI technologies to create tailored content more efficiently, resulting in a 74% year-over-year increase in AI learner bases and a 158% growth in AI learning hours [3] - Despite a 2.4% decrease in content and software development expenses and a 7.1% decline in selling and marketing expenses, SKIL experienced a 6% year-over-year drop in revenue due to challenges in the global knowledge segment [4] - Management is conducting a strategic review to address inefficiencies in the GK segment, which has negatively impacted the adjusted EBITDA margin by 130 basis points year-over-year [5] - Skillsoft is trading at a forward price-to-earnings ratio of 0.96, significantly lower than its median of 2.82, indicating a more attractive valuation for investors [13] Duolingo (DUOL) - Duolingo integrates AI into its core business model, which has driven a 30% year-over-year increase in daily active users and a 28% rise in paid subscribers [6] - However, the outlook for 2026 shows a concerning decline in growth, with management projecting an 11% year-over-year increase in bookings, down from 33% in 2025 [7] - The company anticipates a decrease in adjusted EBITDA margin to 25% for 2026 from 29.5% in 2025, raising concerns about margin compression [9] - Duolingo is facing challenges in achieving virality, which could hinder its growth trajectory [10] - The Zacks Consensus Estimate for Duolingo's fiscal 2026 sales is $512.2 million, reflecting a 3.6% decline from the previous year, with EPS expected to drop by 3.7% [11] Comparative Analysis - Skillsoft presents a deep-value proposition with its AI-first model and strategic pivot, while Duolingo's premium valuation of 28.06X raises concerns given its declining growth prospects for 2026 [16][17] - Skillsoft is currently rated as a Zacks Rank 3 (Hold), while Duolingo holds a Zacks Rank 4 (Sell) [17]

Core Insights - Skillsoft Corp.'s (SKIL) Percipio has transitioned the company from a traditional content provider to an AI-first skill-management organization, which is crucial for its market positioning [1] - The launch of the next-gen Skillsoft Percipio platform addresses the increasing demand for a connection between learning, skills development, and business performance, with a focus on workforce readiness [2] - Percipio's repositioning is supported by CAISY, LX Design Studio, and agentic AI capabilities, enabling faster bespoke content generation and efficient management of human and AI agents [3] Performance Metrics - The AI learner base increased by 74% year over year, while AI learning hours rose by 158%, indicating that Percipio is a key growth driver for the company [4][8] - The dollar retention rate for the talent development solutions segment remained at 99%, showcasing Percipio's role in retaining recurring revenues from existing customers [4][8] Strategic Positioning - Percipio allows SKIL to move away from the commoditized content market and enter the skills intelligence domain, with optimism about its potential to drive measurable business outcomes [5] - The company has experienced a significant decline in share price, dropping 84.7% over the past year, contrasting with the industry's 7% growth [6] Valuation Insights - SKIL trades at a 12-month forward price-to-earnings ratio of 0.86X, significantly lower than peers Enpro Inc. at 29.36X and Coherent Corp. at 40.78X, as well as the industry average of 21.95X [10] - The Zacks Consensus Estimate for EPS for 2026 and 2027 is projected at $4.17 and $4.64, respectively, remaining flat over the past 60 days [13]

Core Viewpoint - Skillsoft announced the grant of restricted stock units (RSUs) to new executives as part of their employment inducement strategy under NYSE Rule 303A.08, highlighting the company's commitment to attracting top talent in the AI-native skills management sector [1]. Group 1: Employee Inducement Grants - On February 18, 2026, Skillsoft's Talent and Compensation Committee granted 95,000 RSUs to Bernard Barbour as an inducement for his hiring as Chief Technology and Product Officer [1]. - The RSUs granted to Barbour will vest 50% ratably over four years, while the remaining 50% is contingent on achieving specified annual revenue growth targets, with vesting up to 175% based on performance [1]. - Additionally, 25,000 RSUs were granted to David Koehn as an inducement for his hiring as SVP, Product Management on January 5, 2026 [1]. Group 2: Company Overview - Skillsoft is recognized as a global leader in AI-native skills management, focusing on the integration of learning, skills intelligence, and workforce insights to enhance business outcomes [1]. - The company supports over 105 million learners globally and is trusted by 60% of the Fortune 1000, indicating a strong market presence and demand for its services [1].

Core Insights - Skillsoft Corp. (SKIL) shares have decreased by 75.2% over the past year, contrasting with a 4.4% growth in its industry and a 19.1% rise in the Zacks S&P 500 Composite [1] - The company has underperformed compared to peers such as Coherent Corp. (COHR), which saw a 161.5% increase, and Dave's (DAVE) 71.2% growth during the same period [1] Financial Performance - In the last six months, SKIL has lost 47.2%, while Coherent Corp and Dave experienced rallies of 95.9% and 0.4%, respectively [4] - For the third quarter of fiscal 2026, Skillsoft reported a 6% year-over-year decline in revenue, primarily due to a 16% drop in the Global Knowledge (GK) segment [5][6] - The GK segment's revenue decline was attributed to reduced demand for both physical and virtual instructor-led sessions, resulting in a non-cash goodwill impairment loss of $20.8 million and an adjusted net loss of $4.9 million [6] Strategic Initiatives - Skillsoft is conducting a strategic review of its GK segment with the potential for a sale, which could impact the balance sheet due to market reduction [5][6] - The Talent Development Solutions (TDS) segment experienced a 2% year-over-year dip, but management remains optimistic about the future growth potential driven by AI, particularly through the Percipio platform [7][9] Valuation Metrics - SKIL is trading at 1.6 times forward earnings, significantly lower than the industry average of 23.4 times, and has a trailing 12-month EV-to-EBITDA ratio of 2.5 compared to the industry average of 17.1 [10] - The company's return on equity (ROE) stands at 83.1%, well above the industry average of 15.6%, indicating effective utilization of shareholders' equity [12] - Return on invested capital is at 11.6%, surpassing the industry average of 7.7%, showcasing the company's efficiency in generating operating profits [14] Liquidity Concerns - Skillsoft's current ratio is 0.8, significantly below the industry average of 1.6, raising concerns about its liquidity sustainability [15] - The consensus estimate for revenues in the fourth quarter of fiscal 2026 is $130.2 million, reflecting a 2.7% decline year-over-year, while the EPS estimate is $1.27, indicating a 39.8% year-over-year decline [16] Future Outlook - For fiscal 2026, the revenue consensus estimate is $512.2 million, suggesting a 3.6% year-over-year dip, with EPS expected to fall by 3.7% to $4.17 [17] - The management's strategic review of the GK segment is seen as crucial for the company's future, with potential benefits for the TDS segment and the Percipio platform [18][19]

Core Insights - Skillsoft (SKIL) and Udemy (UDMY) are direct competitors in the online learning and corporate training sector, focusing on workforce development and lifelong learning [1] Group 1: Skillsoft (SKIL) - Skillsoft experienced a turbulent growth trajectory, with a 6% year-over-year revenue decline in Q3 of fiscal 2026, primarily due to an 18% drop in the Global Knowledge (GK) segment, which constitutes 22% of total revenue [2][3] - The GK segment incurred a $20.8 million non-cash goodwill impairment loss, resulting in a $4.9 million adjusted net loss, prompting management to consider strategic alternatives for this segment [3] - The Talent Development Solutions (TDS) segment saw a 2% year-over-year decline, but management remains optimistic about its AI-native roadmap, having signed its first four large enterprise customers [3] - Cost reductions led to a $28 million adjusted EBITDA, despite a 130 basis points dip in adjusted EBITDA margin year-over-year, indicating resilience amid declining GK revenues [5] - Skillsoft is trading at a forward P/E ratio of 1.92, significantly lower than Udemy's 10.25, making it more attractive to investors [12] Group 2: Udemy (UDMY) - Udemy reported $195.7 million in revenue for Q3 of 2025, reflecting a marginal year-over-year increase, with subscription revenues growing 8% and accounting for 74% of total revenues [6] - The company achieved an 88% year-over-year increase in paid subscribers in the consumer segment, alongside a 2% rise in total enterprise customers, attributed to AI integration and a focus on high-value recurring revenue streams [7] - Udemy's adjusted EBITDA margin expanded by 600 basis points to 12%, driven by operational discipline and a shift towards high-margin subscriptions [7] - Despite these positives, Udemy faces challenges, including a 5% year-over-year increase in Udemy Business revenues and a net dollar retention rate of 93%, impacted by the downsizing of legacy contracts [8] - The consensus estimate for Udemy's 2026 sales is $806 million, reflecting a 2.2% year-over-year increase, while EPS is projected to decline by 5.5% [11] Group 3: Investment Recommendation - Skillsoft is recommended for investment due to its lower valuation and potential for long-term returns as it focuses on becoming a leaner AI-first entity [14][16] - Udemy is advised to be retained for now, pending further justification of revenue growth from customer and subscriber increases [16]

Core Viewpoint - Skillsoft Corp. (SKIL) is currently viewed as a better investment option compared to Symbotic Inc. (SYM) for those seeking undervalued stocks due to its strong earnings outlook and favorable valuation metrics [3][7]. Valuation Metrics - SKIL has a forward P/E ratio of 2.28, significantly lower than SYM's forward P/E of 154.24, indicating that SKIL is more attractively priced relative to its earnings [5]. - The PEG ratio for SKIL is 0.23, while SYM's PEG ratio is 5.14, suggesting that SKIL is expected to grow its earnings at a more favorable rate compared to SYM [5]. - SKIL's P/B ratio stands at 20.73, compared to SYM's P/B of 75.91, further highlighting SKIL's relative undervaluation [6]. Investment Ratings - SKIL holds a Zacks Rank of 1 (Strong Buy), indicating a positive earnings estimate revision trend, while SYM has a Zacks Rank of 4 (Sell), suggesting a less favorable earnings outlook [3]. - Based on the valuation figures and earnings outlook, SKIL has earned a Value grade of A, whereas SYM has received a Value grade of F, reinforcing SKIL's position as the superior value option [6].

Core Insights - Skillsoft Corp. (SKIL) experienced a 6% year-over-year decline in revenue during Q3 2026, primarily due to an 18% drop in Global Knowledge (GK) revenues, although the company maintained its margins through operational discipline [1][9] Financial Performance - The company recorded total operating expenses of $101 million, a 4.1% decrease year-over-year, achieved by reducing content, software, sales, marketing, and general and administrative expenses [2][9] - Productivity improvements from AI and a focused strategy led to a 2.4% year-over-year reduction in content and software development expenses, while selling and marketing expenses decreased by 7.1% due to headcount reductions [3][9] - General and administrative expenses saw an 11.9% year-over-year decline, contributing to an adjusted EBITDA of $28 million, with an adjusted EBITDA margin of 22%, down from 23.3% in the previous year [4][9] Segment Analysis - The Talent Development Solutions segment remained profitable, while the GK segment reported a negative EBITDA of $3.3 million, indicating a strategic shift towards higher-margin SaaS platforms to stabilize long-term margins [5][9] Market Performance - Over the past year, SKIL's stock has decreased by 71.3%, contrasting with the industry growth of 10.2%, while peers Nable (NABL) and Agora (API) saw declines of 30.3% and 8.6%, respectively [6][9] Valuation Metrics - SKIL trades at a 12-month forward price-to-earnings ratio of 1.99X, significantly lower than the industry average of 25.21X and cheaper than Nable's 12.9X and Agora's 26.81X [10] - The Zacks Consensus Estimate for EPS for 2025 is $4.17, revised up by 19.8% in the last 60 days, while the estimate for 2026 is $4.54, revised down by 9.9% [13]

Group 1: Ciena Corporation (CIEN) - Ciena Corporation is a network technology company with a Zacks Rank 1 [1] - The Zacks Consensus Estimate for its current year earnings has increased by 22.3% over the last 60 days [1] - The company has a PEG ratio of 1.11, significantly lower than the industry average of 5.29, and possesses a Growth Score of A [1] Group 2: Skillsoft Corp. (SKIL) - Skillsoft Corp. is a digital learning solutions provider with a Zacks Rank 1 [2] - The Zacks Consensus Estimate for its current year earnings has increased by 19.8% over the last 60 days [2] - The company has a PEG ratio of 0.20, compared to the industry average of 0.76, and possesses a Growth Score of B [2] Group 3: Patria Investments Limited (PAX) - Patria Investments Limited is a private equity company with a Zacks Rank 1 [3] - The Zacks Consensus Estimate for its current year earnings has increased by 1.6% over the last 60 days [3] - The company has a PEG ratio of 0.81, lower than the industry average of 1.70, and possesses a Growth Score of A [3]

Core Insights - Skillsoft Corp. (SKIL) is transitioning to an AI-native platform, which is becoming essential for the company's growth strategy and market approach [1][8] - The CEO has compared Skillsoft's AI-driven model to that of Netflix, indicating strong management confidence in this strategic pivot [2] - AI integration has led to a 2.4% year-over-year reduction in content and software development expenses due to increased productivity [3][8] Financial Performance - SKIL's revenues decreased by 6% year-over-year to $129 million in Q3 of fiscal 2026, primarily due to an 18% decline in the Global Knowledge segment [4] - The Talent Development Solutions segment shows potential for growth despite overall revenue challenges [4] AI Integration and Strategy - Over 50% of content design, curation, and production utilized AI in Q3 of fiscal 2026, demonstrating the company's commitment to AI in its operations [2][8] - The integration of AI and CAISY into the next-generation Skillsoft Percipio aims to enhance learning experiences and support enterprise contracts [5][8] Market Position and Valuation - Skillsoft's stock has decreased by 73% over the past year, contrasting with a 19.4% growth in the industry [6] - The company trades at a forward price-to-sales ratio of 0.14, significantly lower than peers VerifyMe (1.04) and Agora (2.94) [10] - Skillsoft holds a Value Score of A, while its peers have lower scores, indicating a favorable valuation perspective [13]

Core Viewpoint - Investors in the Technology Services sector should consider Skillsoft Corp. (SKIL) and AppLovin (APP) as potential value opportunities, with SKIL currently presenting a stronger case for investment [1]. Group 1: Company Rankings and Outlook - Skillsoft Corp. has a Zacks Rank of 1 (Strong Buy), indicating a favorable earnings outlook, while AppLovin holds a Zacks Rank of 2 (Buy) [3]. - SKIL has likely experienced a stronger improvement in its earnings outlook compared to APP, making it more appealing to value investors [3]. Group 2: Valuation Metrics - SKIL has a forward P/E ratio of 2.13, significantly lower than APP's forward P/E of 40.72, suggesting SKIL is undervalued relative to APP [5]. - The PEG ratio for SKIL is 0.21, indicating strong expected EPS growth, while APP's PEG ratio is 2.04, suggesting less favorable growth expectations [5]. - SKIL's P/B ratio is 19.44, compared to APP's P/B of 141.61, further highlighting SKIL's relative value [6]. Group 3: Value Grades - Based on various valuation metrics, SKIL holds a Value grade of A, while APP has a Value grade of D, reinforcing SKIL's position as the superior value option [6].