Online education company Coursera (NYSE:COUR) recently announced quarterly earnings, and the disappointment with the results of the AI implementation was felt immediately, with its stock value losing over 39% to date, plunging to an all-time low.
As a result, management has lowered guidance for Q2 and full-year 2024 expectations. Investors may want to wait on the sideline until the smoke clears and the stock has more positive market sentiment and momentum.
Coursera Expands Its Platform
Coursera is an online learning platform originally created by Stanford professors that currently boasts 148 million registered learners globally. The platform offers a wide range of learning materials and qualifications, provided in collaboration with over 325 universities and industry partners, preparing students for fields such as data science, technology, and business.
Recently, Coursera has seized an opportunity in the emerging technology of generative AI, which is anticipated to greatly enhance the platform’s revenue and share price. Collaborations with industry leaders, including Microsoft, Google Cloud, Amazon Web Services, and Stanford University, enabled the company to implement their technology within the academy and created even higher expectation that haven’t come to fruition.
Highlights From Coursera’s Recent Financials
Coursera recently announced Q1 2024 financial results, exceeding earnings per share (EPS) expectations with a Q1 Non-GAAP EPS of $0.07, beating consensus projections of $0.00. However, the revenue of $169.1 million fell short by $1.3 million despite showing a 15% year-on-year increase.
Looking ahead, Coursera’s has lowered outlook for the second quarter based on softness in North American consumer spending and the slow adoption of its recently built AI platform. For 2024, management projects a revenue range of $162 to $166 million versus consensus expectations of $177.8 million. For the full year, revenue is expected to lie in the range of $695 to $705 million, also short of expectations of $736.5 million.
What is the Price Target for COUR Stock?
Analysts following Coursera have been constructive on the stock. Several have revised their price targets downward following the company’s Q1 results and subsequent guidance while maintaining Buy recommendations. For example, BMO Capital analyst Jeffrey Silber lowered the price target on Coursera to $13 from $20 after its Q1 results and below consensus guidance but has reiterated an Outperform rating on the shares.
Coursera is rated a Moderate Buy based on the ratings and 12-month price targets assigned over the past three months by 11 Wall Street analysts. The average price target for COUR stock is $16.70, representing a 79.57% upside from current levels.
Summary
Coursera has been navigating slowing consumer spending and the slower-than-anticipated adoption of its AI-related offerings. The company is bracing for a financial outlook in Q2 and the rest of 2024 that falls short of consensus expectations. While future growth prospects look promising, until management can point to positive AI-linked results, investor sentiment on the stock will likely remain subdued.
