Shares of Coursera (NYSE:COUR) are surging higher by over 45% after the online educational provider reported its second quarter earnings.
Coursera’s revenue tallied in at $170.3 million, up by 11% year-over-year and beating the analyst estimate for $164.7 million. Its adjusted EPS of nine cents also topped the estimate for one cent.
CEO Jeff Maggioncalda highlighted the positive effects of AI, adding that the company’s generative AI catalog has surpassed two million enrollments.
“With our global scale, trusted brands, and focus on high-quality credentials, we are creating a leading destination for learners looking to discover, develop, and demonstrate generative AI skills for career advancement,” said Maggioncalda.
The positive report was well needed for Coursera, as COUR was down by about 63% year-to-date as of yesterday. That decline has since eased to about 44%.
Still, guidance wasn’t as promising. The company guided for third quarter revenue between $171 and $175 million, short of the estimate for $179 million. It reiterated its 2024 full year revenue for between $695 and $705 million. Analysts currently expect $700 million.
COUR Stock: Cantor Fitzgerald Raises Price Target to $22
Following the news, Cantor Fitzgerald analyst Brett Knoblauch raised his price target to $22 from $21. His target is based on a 4x multiple of expected 2025 enterprise value (EV)/sales, lower than the average peer multiple at 4.3x.
Knoblauch continues to believe that Coursera will be able to disrupt the traditional education system. While he left his 2024 revenue estimate “relatively unchanged,” he raised his 2025 revenue estimate by 1.1% and his 2024 and 2025 adjusted EBITDA estimates by 0.2% and 1.2%, respectively. This was largely due to the company’s better than expected demand for its AI offerings.
“With shares trading at a discount to peers, a cash balance of $721m, and no debt, we remain of the opinion that upside far outweighs downside at current levels,” said the analyst.
However, not all of Wall Street was sold. Goldman Sachs analyst Eric Sheridan lowered his target to $9 from $10.50, citing uncertainty about how enterprises will use generative AI and the role that Coursera could play in that process.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
