As previously reported, Morgan Stanley analyst Brian Essex downgraded Instructure to Equal Weight from Overweight following the company's lower than anticipated billings for Q4 and in-line revenue guidance for FY19. Lighter than anticipated billings growth, Academic RFP softness and lengthening Enterprise sales cycles keep him from raising his forecasts despite Instructure's better than expected Q4 revenue and EBITDA, said Essex, who maintains his $45 price target on the stock.

Morgan Stanley lowered the firm's price target on Instructure (INST) to $28 from $31 and keeps an Overweight rating on the shares. While the firm's fundamental estimates are unchanged, it has updated valuation multiples to reflect compression in the Education Software peer group, noting that revenue and EBITDA multiples are down low-double digits on average since last earnings. Among the group, the firm says it favors Docebo (DCBO) and Coursera (COUR) as it sees them with "the cleanest stories" and best likelihood for positive estimate revisions, which at odds with their discounted valuations.