2 Reasons to Watch COUR and 1 to Stay Cautious

2 Reasons to Watch COUR and 1 to Stay Cautious
COUR

Over the past six months, Coursera’s stock price fell to $5.90. Shareholders have lost 18.8% of their capital, which is disappointing considering the S&P 500 has climbed by 7.7%. This was partly due to its softer quarterly results and might have investors contemplating their next move

Given the weaker price action, is now the time to buy COUR?Find out in our full research report, it’s free

Why Does Coursera Spark Debate?

Founded by two Stanford University computer science professors, CourseraCOURis an online learning platform that offers courses, specializations, and degrees from top universities and organizations around the world

Two Things to Like:

1. Projected Revenue Growth Is Remarkable

Forecasted revenues by Wall Street analysts signal a company’s potential. Predictions may not always be accurate, but accelerating growth typically boosts valuation multiples and stock prices while slowing growth does the opposite, though some deceleration is natural as businesses become larger

Over the next 12 months, sell-side analysts expect Coursera’s revenue to rise by 82.6%, an improvement versus This projection is eye-popping and indicates its newer products and services will spur better top-line performance

2. Outstanding Long-Term EPS Growth

We track the long-term change in earnings per share (EPS) because it highlights whether a company’s growth is profitable

Coursera’s full-year EPS flipped from negative to positive over the last three years. This is a good sign and shows it’s at an inflection point

One Reason to Be Careful:

Poor Marketing Efficiency Drains Profits

Consumer internet businesses like Coursera grow from a combination of product virality, paid advertisement, and incentives (unlike enterprise software products, which are often sold by dedicated sales teams)

It’s very expensive for Coursera to acquire new users as the company has spent 63.1% of its gross profit on sales and marketing expenses over the last year. This inefficiency indicates a highly competitive environment with little differentiation between Coursera and its peers

Final Judgment

Coursera’s positive characteristics outweigh the negatives. With the recent decline, the stock trades at 2.6× forward EV/EBITDA (or $5.90 per share). Is now the right time to buy?See for yourself in our comprehensive research report, it’s free

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