Coursera Stock: Mixed Analyst Opinions as AI Demand Surges

Coursera shares target raised by Cantor Fitzgerald as AI demand rockets By Investing.com

On Friday, Cantor Fitzgerald adjusted its outlook on Coursera Inc (NYSE: NYSE:COUR), raising the shares target to $22.00 from $21.00 while maintaining an Overweight rating. The firm's decision follows Coursera's performance, which surpassed consensus estimates on key financial metrics. The analyst cited a robust quarter for Coursera, noting the company's success in exceeding expectations for both revenue and earnings before interest, taxes, depreciation, and amortization (EBITDA). The firm's confidence in Coursera is further bolstered by the increased interest in artificial intelligence (AI)-related content. The financial institution has slightly adjusted its future revenue and EBITDA forecasts, indicating a 1.1% increase in FY25 revenue predictions and a 0.2% to 1.2% rise in adjusted EBITDA estimates for FY24 and FY25. Coursera's position in the market is seen as strong due to several factors. The analyst believes that Coursera stands as a fundamental disruptor in an education sector that has traditionally been slow to innovate. The company's stock is currently trading at a discount compared to its peers, which, combined with a healthy cash balance of $721 million and the absence of debt, suggests a favorable risk-reward scenario for investors. The revised price target of $22.00 is based on a targeted multiple of 4.0 times the company's estimated 2025 enterprise value to sales (EV/Sales), which is slightly conservative compared to the peer group average of 4.3 times. The analyst emphasizes the relevance of using 2025 estimates for valuation, given that the year 2024 is more than halfway through. The firm's approach reflects a cautious yet optimistic outlook on Coursera's financial trajectory. In other recent news, Coursera Inc. demonstrated robust performance in its second quarter of 2024, reporting a revenue increase of 11% year-over-year to $170.3 million. This growth was largely driven by an uptick in international learners and strong enrollment numbers. Despite a sustained Enterprise Retention rate below 100%, Coursera received positive remarks on its content publication and distribution efforts, and the introduction of Coursera Coach. Goldman Sachs (NYSE:GS), however, adjusted its outlook on Coursera, reducing the 12-month price target from $10.50 to $9.00, while maintaining a Sell rating. Needham, in contrast, maintained a Buy rating on Coursera, following the company's better-than-expected Q2 results. Coursera's recent developments also include advancements in its generative AI offerings, with over two million enrollments in its AI catalog, and the launch of a record 16 new professional certificate programs. Looking ahead, Coursera expects Q3 revenue to range between $171 million and $175 million and plans to continue expanding its Degree and Enterprise segments. Recent data from InvestingPro provides a deeper dive into Coursera Inc's financial health and market performance. The company's market capitalization stands at $1.16 billion, indicating a significant presence in the e-learning industry. Despite a negative P/E ratio of -10.84, reflecting current unprofitability, Coursera has shown a substantial revenue growth of 19.28% over the last twelve months as of Q1 2024. This growth is a testament to the company's expanding influence and market share in the education technology sector. InvestingPro Tips highlight several key aspects of Coursera's strategic positioning. Management's aggressive share buyback initiative and the fact that the company holds more cash than debt on its balance sheet are promising signs for investors. Additionally, while the stock has faced a steep decline over the last six months, it has rebounded strongly over the past month with a 14.0% price total return. Analysts predict a return to profitability this year, which, if realized, could further bolster investor confidence. For those interested in a comprehensive analysis, InvestingPro offers additional tips on Coursera, which can be accessed by subscribing to the service. Use the coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription. With 11 additional InvestingPro Tips available, investors can gain an in-depth understanding of Coursera's potential and make informed decisions.

Goldman Sachs sets Sell rating for Coursera stock on "unanswered questions" By Investing.com

The adjustment followed Coursera's second-quarter earnings report, which highlighted several key points including higher than anticipated Q2 revenue driven by consumer segment performance. Despite this, the company experienced a sustained Enterprise Retention rate below 100%. The report also noted Coursera's advancement in achieving adjusted EBITDA ahead of predictions, with a hint at a mix of investments and second-half guidance that might be perceived as a modest decline compared to previous operations. Additionally, the company received positive remarks on its content publication and distribution efforts, as well as the initial results from the introduction of Coursera Coach. The analyst from Goldman Sachs indicated that investor attention is likely to stay on Coursera's operational progress relative to the guidance for the second half of the year and how the demand in their market segments evolves. Looking further ahead, there remain unanswered questions regarding the adoption and impact of generative AI in enterprise environments and what role Coursera's platform will play in this emerging area. The firm's reiteration of the Sell rating on Coursera's stock is now more based on the relative risk/reward compared to other companies in its coverage universe rather than the absolute downside from current levels. The revised price target reflects this updated assessment. In other recent news, Coursera Inc. has reported strong financial results for the second quarter of 2024, with revenue rising to $170.3 million, marking an 11% increase from the previous year. The company's robust performance was largely attributed to an increase in international learners and strong enrollment numbers. Moreover, Coursera launched a record 16 new professional certificate programs, contributing to further growth. Needham, a financial consulting firm, maintained a Buy rating on Coursera, following the company's better-than-expected Q2 results and its cautious forecast for the fiscal year. Needham anticipates that Coursera's revenue and EBITDA will likely increase in the latter half of 2024, driven by the launch of new Degree programs. Coursera's Q2 success also featured advancements in its generative AI offerings, with over two million enrollments in its AI catalog. The company also introduced AI-powered innovations such as Coursera Coach and Course Builder, enhancing the learning experience for users. Looking forward, Coursera expects Q3 revenue to range between $171 million and $175 million. The company also plans to continue launching professional certificates and expanding its Degree and Enterprise segments. These are recent developments, reflecting Coursera's ongoing efforts to diversify and adapt to market demands. As Coursera Inc (NYSE: COUR) navigates the market's response to its Q2 earnings report and revised guidance, InvestingPro data and tips provide a nuanced perspective on the company's financial health and stock performance. With a market capitalization of approximately $1.16 billion and a notable revenue growth of 19.28% in the last twelve months as of Q1 2023, Coursera's financial trajectory shows signs of expansion. Despite a challenging period with a 3-month price total return of -38.1% and a 6-month price total return of -62.69%, the company's strong return over the last month of 14.0% suggests a potential rebound in investor sentiment. InvestingPro Tips highlight Coursera's strategic financial management, with the company holding more cash than debt on its balance sheet and liquid assets exceeding short-term obligations. These indicators, coupled with an aggressive share buyback strategy by management, reflect a proactive approach to capital allocation. However, it's important to note that Coursera has not been profitable over the last twelve months, and the price has taken a significant hit over the last three to six months. On the upside, analysts predict the company will be profitable this year, and net income is expected to grow. For investors looking for a deeper dive into Coursera's financials and stock analysis, InvestingPro offers additional insights and tips to guide investment decisions. Use coupon code PRONEWS24 to get up to 10% off a yearly Pro and a yearly or biyearly Pro+ subscription. There are 11 additional InvestingPro Tips available for Coursera Inc, providing a more comprehensive understanding of the company's performance and prospects.