Coursera Stock Sinks as Analysts Downgrade Shares After Guidance Cut

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Coursera reduced its sales estimate for the full year.

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Courtesy of Coursera

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Coursera cratered Thursday after at least two analysts downgraded the stock following the online education company’s disappointing quarterly earnings and cut to its revenue outlook.

On a conference call following the release of earnings, Coursera (ticker: COUR) said revenue growth was “lower than anticipated, particularly the performance in ourconsumer and degrees segments.” In consumer, it saw “somewhat weaker conversion rates in several markets outside of the US, with a more pronounced impact” in Europe, the Middle East and Africa. In degrees, the company said, it was seeing lower-than-expected student enrollments.

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Raymond James analyst Brian Peterson cut his rating on Coursera to Market Perform from Outperform. He thinks lower visibility on the consumer business limits any near-term catalyst for the stock to go higher.

Stifel’s Scott Devitt also reduced his rating. He wants to wait for evidence of reaccelerating growth and more meaningful progress on the path to profit. He acknowledged, however, that the long-term opportunity for Coursera is still appealing, pointing to $783 million in cash and no debt on Coursera’s balance sheet. He dropped his rating to Hold from Buy.

The stock was falling sharply Thursday, down 22% to $12.65.

For the full year, Coursera estimates sales of $509 million to $515 million, lower than sales of $538 million to $546 million that the company said it expected in April. Analysts were estimating full-year sales of about $543 million.

The company on Wednesday reported an adjusted loss in the second quarter of 15 cents a share, wider than forecasts that called for a loss of 14 cents. Revenue of $124.8 million fell short of the $130.4 million analysts expected.

To be sure, several analysts are still holding on to their bullish ratings on the stock despite the near-term outlook.

Needham analyst Ryan Macdonald kept his Buy rating. He thinks the selloff in shares presents an opportunity given the bright spot in enterprise segment revenue in the latest quarter. The company’s enterprise segment includes Coursera for Government, Campus and Business.

However, Macdonald did slash his price target to $19 from $32.

Overall the enterprise segment grew by 55.1% in the latest quarter, slightly more than analysts’ estimates of 54.3% year-over-year growth.

Truist analyst Terry Tillman and KeyBanc’s Jason Celino maintained their Buy and Overweight rating, respectively. Both of them highlighted the long-tail growth opportunity associated with the $2 trillion higher education industry.

Write to Karishma Vanjani at [email protected]


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