Due to the onset of the Covid-19 pandemic, a new renaissance in online education ensued in 2020. It’s still an important market, and enterprising investors might consider Coursera (NYSE:COUR) as COUR stock recently became available for public trading.
Sure, there was the hype phase during Coursera’s initial public offering (IPO).
However, the enthusiasm has already worn off and the share price has fallen sharply.
It’s an interesting situation in which the market doesn’t seem fully convinced of Coursera’s value. So, should we listen to the market and avoid COUR stock altogether?
Since Coursera recently released some critical fiscal data, we can just examine the facts and make our own decisions. After all education is the key to success in the long run. I’m sure Coursera would agree.
A Closer Look at COUR Stock
March 31, 2021 was an important day as that’s when COUR stock became available for public trading on the New York Stock Exchange.
The stock was originally expected to be priced between $30 and $33. Coursera ended up setting the offering price at $33, but the stock actually opened for public trading at $39.
That day, COUR stock closed up 36% at a price of $45. With that, Coursera now had a market capitalization of $5.9 billion.
The rally did continue for a little while longer. On April 7, the stock reached a 52-week high of $62.53.
However, COUR stock declined after that. At the end of the trading day on May 7, the shares were priced at $36.14. It will open today at about $39.
Should the stockholders give up hope and should prospective investors stay away?
Again, we’ll dig deeper and let the data guide us. In doing so, perhaps we can identify reasons to stay the course with Coursera.
Democratizing Education, Profitably
With higher education being so expensive nowadays, I’ve got to give Coursera credit for making college-level learning more accessible to the public.
As co-founder and Chairman Andrew Ng put it, “We started Coursera to democratize access to high-quality education [with a mission] to transform lives through learning.”
There are statistics to demonstrate that Coursera is succeeding in this endeavor. Impressively, more than 200 universities and institutions of learning have worked with Coursera.
And, there’s practically something for everyone who’s interested in adult education. Coursera offers:
- more than 4,600 courses
- over 1,000 “guided projects” to learn job skills in less than two hours
- a variety of professional certification programs
Is all of this translating into revenues? I’d say the answer is yes, but don’t just take my word for it.
Instead, take the company’s word for it. According to Coursera, the company had over 77 million registered learners on the platform at the end of 2020.
Moreover, Coursera claims to have more than 2,000 business customers. If you’re impressed with those figures, it only gets better from here.
Embracing Online Learning
Not long after the company’s IPO, Coursera posted its first-quarter 2021 fiscal results.
If there was any doubt that the Covid-19 pandemic provided a tailwind for Coursera, the company’s quarterly revenues should put that doubt to rest.
Specifically, Coursera’s first-quarter revenues totaled $88.4 million. That represents a 64% increase on a year-over-year basis.
We can break this down into segments:
- Consumer revenues of $51.9 million, up 61%
- Enterprise revenues of $24.5 million, up 63%
- Revenues from degree programs totaling $12 million, up 81%
In case that isn’t enough for you, then note that Coursera added five million net new registered learners during the first quarter. With that, the total stood at 82 million.
Coursera CEO Jeff Maggioncalda suggested that this growth is part of a much larger phenomenon.
“Our strong first-quarter performance reflects the continued trend of individuals and institutions embracing online learning to develop skills for a digital future,” Maggioncalda explained.
The Bottom Line on COUR Stock
Worried that the trend towards online learning is coming to a standstill? You shouldn’t be.
Coursera’s ability to generate strong revenues is proof positive that digital education is here to stay – and that the dip in COUR stock is worth buying.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article.