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Nerdy (NRDY)
:NRDY
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Nerdy
(NYSE:NRDY)
48Neutral
Positive Factors
AI Tools
Nerdy's AI tools are enhancing frequency and engagement amongst new learners, leading to higher usage and a 99% positive feedback rate from parents and students.
Consumer Segment
The Consumer segment is beginning to hit its stride following the transition to learning memberships, offsetting Institutional weakness.
Expert Incentives
Nerdy is implementing new tutoring compensation with expert incentives, leading to improvements in session time, number of sessions, and a reduction in tutor replacement rates, driving better customer retention.
Negative Factors
Active Members
NRDY expects Active Members to decline sequentially to ~36k in 4Q, with a net loss of 4k members.
Institutional Revenue
Institutional revenue declined -3% Y/Y in 3Q and VTS Bookings of $8.5M were softer than expected due to lower deal size.
Q4 Guidance
Nerdy expects Q4 revenue of $44-47M, down 15-20% y/y and well below consensus of $57M, reflecting lower active members entering the quarter due to higher cancellations of older cohorts of lower frequency memberships.
Nerdy (NRDY) vs. S&P 500 (SPY)
Market Cap
$290.09M
Dividend YieldN/A
Average Volume (3M)1.09M
Price to Earnings (P/E)―
Beta (1Y)1.96
Revenue Growth-1.64%
EPS Growth9.99%
CountryUS
Employees600
SectorTechnology
Sector Strength54
IndustrySoftware - Application
Share Statistics
EPS (TTM)-0.38
Shares Outstanding118,051,630
10 Day Avg. Volume842,113
30 Day Avg. Volume1,087,574
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)1.52
Price to Cash Flow (P/CF)-6.40
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$2.08Price Target Upside30.82% Upside
Rating ConsensusHold
Number of Analyst Covering7
Nerdy Business Overview & Revenue Model
Company DescriptionNerdy (NRDY) is an innovative education technology company that operates primarily in the online learning sector. The company offers a wide range of personalized learning solutions, including one-on-one tutoring, small group classes, and self-paced courses across various subjects and skill levels. Nerdy's core product, the Varsity Tutors platform, connects students with experts and educators, providing tailored instruction to enhance learning outcomes.
How the Company Makes MoneyNerdy makes money through a multi-faceted revenue model centered around its online learning platform, Varsity Tutors. The company generates revenue primarily from direct-to-consumer sales, where students or their parents pay for tutoring sessions, classes, and courses. These services are offered on a subscription basis or as one-time purchases. Additionally, Nerdy partners with educational institutions and businesses to provide tailored learning solutions and professional development programs, creating additional revenue streams. Other significant factors contributing to Nerdy's earnings include the scalability of its platform, which allows it to reach a broad audience, and strategic partnerships that expand its market presence and enhance its offerings.
Nerdy Financial Statement Overview
Summary
Nerdy shows strong revenue growth and a solid cash position, but struggles with profitability and negative cash flows. The balance sheet is stable with no debt and improved equity, but cash flow issues need addressing for long-term growth.Income Statement
Nerdy's income statement shows a consistent increase in revenue over the years, indicating growth potential, with a revenue growth rate of 16.3% from 2020 to 2021 and 18.1% from 2019 to 2020. However, the company is struggling with profitability, as shown by negative EBIT and net profit margins. The gross profit margin in 2024 was approximately 67.5%, but the net profit margin remains negative due to significant losses.45
Neutral
Balance Sheet
The balance sheet indicates Nerdy has consistently maintained a strong cash position with no debt as of 2024, which is a positive sign of financial stability. Despite this, the company has faced challenges in sustaining positive equity. The debt-to-equity ratio is not applicable in 2024 due to zero debt, but the equity ratio has improved to about 42.7%, reflecting a strengthened balance sheet.50
Neutral
Cash Flow
Nerdy's cash flow statements reveal negative operating and free cash flows, indicating difficulties in generating cash from its core operations. The free cash flow to net income ratio is negative, showing reliance on external funding. This presents a challenge for future liquidity and investment capabilities.40
Negative
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 190.23M | 193.40M | 162.66M | 140.66M | 103.97M | Gross Profit |
| 128.39M | 136.45M | 112.93M | 93.96M | 69.13M | EBIT |
| -70.11M | -57.57M | -90.81M | -93.44M | -17.93M | EBITDA |
| -70.11M | -50.80M | -87.67M | -93.44M | -13.72M | Net Income Common Stockholders |
| -42.59M | -40.17M | -63.91M | -30.68M | -27.74M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 52.54M | 74.82M | 90.72M | 143.96M | 29.27M | Total Assets |
| 92.51M | 124.74M | 132.69M | 177.15M | 57.27M | Total Debt |
| 928.00K | 4.67M | 1.53M | 841.00K | 47.58M | Net Debt |
| -51.61M | -73.51M | -89.19M | -143.12M | 18.31M | Total Liabilities |
| 31.39M | 39.14M | 51.64M | 81.34M | 455.74M | Stockholders Equity |
| 39.48M | 52.48M | 46.93M | 50.66M | -398.46M |
| Cash Flow | Free Cash Flow | |||
| -22.47M | -14.45M | -53.32M | -44.05M | -9.53M | Operating Cash Flow |
| -15.60M | -7.56M | -48.00M | -38.89M | -6.65M | Investing Cash Flow |
| -6.86M | -6.89M | -5.32M | -5.16M | -2.87M | Financing Cash Flow |
| 0.00 | -1.94M | -1.00M | 159.25M | 12.29M |
Nerdy Technical Analysis
Negative
1.59
Price Trends
1.70
Negative
1.55
Positive
1.42
Positive
Market Momentum
-0.03
Negative
45.21
Neutral
58.80
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NRDY, the sentiment is Negative. The current price of 1.59 is above the 20-day moving average (MA) of 1.56, below the 50-day MA of 1.70, and above the 200-day MA of 1.42, indicating a neutral trend. The MACD of -0.03 indicates Negative momentum. The RSI at 45.21 is Neutral, neither overbought nor oversold. The STOCH value of 58.80 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NRDY.
Nerdy Risk Analysis
Nerdy disclosed 56 risk factors in its most recent earnings report. Nerdy reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Nerdy Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $5.50B | 21.13 | 22.95% | ― | 13.13% | 56.75% | |
78 Outperform | $3.80B | 18.88 | 14.63% | ― | 12.83% | 97.16% | |
74 Outperform | $7.68B | 20.07 | 10.40% | ― | 34.42% | 28.54% | |
68 Neutral | $1.17B | ― | -13.11% | ― | 9.27% | 34.66% | |
58 Neutral | $21.97B | 10.63 | -18.43% | 2.40% | 4.67% | -24.47% | |
48 Neutral | $290.09M | ― | -92.62% | ― | -1.64% | 9.99% | |
47 Neutral | $68.22M | ― | -147.16% | ― | -13.78% | -5297.96% |
* Technology Sector Average
Performance Comparison
NRDY
Nerdy
1.55
-1.36
-46.74%
ATGE
Adtalem Global Education
101.28
49.88
97.04%
LRN
Stride
126.39
63.34
100.46%
EDU
New Oriental Education Tech
47.31
-38.68
-44.98%
CHGG
Chegg
0.65
-6.92
-91.41%
COUR
Coursera
7.27
-6.75
-48.15%
Nerdy Earnings Call Summary
Earnings Call Date: Feb 27, 2025 | % Change Since: 0.00% | Next Earnings Date: May 13, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted significant advancements in AI-driven product innovations and consumer engagement growth, but these were overshadowed by revenue decline, reduced gross margins, and an increased adjusted EBITDA loss. The institutional segment faces challenges due to government funding uncertainties, although strategic shifts and cost-saving measures are being implemented.Highlights
AI-Driven Product Innovations
Nerdy introduced several AI-powered products, including AI session playback, lesson plan generators, and Tutor Copilot, aimed at enhancing the learning experience, increasing retention, and improving operational efficiency.
Consumer Engagement Growth
Consumer engagement rose by 26% year-over-year in the fourth quarter, with improvements in retention and user experience, driven by enhancements in the marketplace infrastructure.
Successful Institutional Strategy
Varsity Tutors for Schools executed 91 contracts, enabling access to the platform for over 5 million students across 1,100 school districts, with 43% of paid contracts from district partners initially accessing the platform for free.
Cost Savings and Efficiency Gains
Nerdy reduced corporate headcount by approximately 15% during Q1 2025, with annualized cash savings of around $6 million due to AI-enabled productivity improvements.
Lowlights
Revenue Decline
Fourth-quarter revenue was $48 million, a decrease of 13% year-over-year, primarily due to lower institutional revenue and a decline in active members and ARPM in the consumer business.
Gross Margin Reduction
Gross margin fell to 66.6% from 71.3% in the same period in 2023, due to lower ARPM and higher utilization of tutoring sessions.
Adjusted EBITDA Loss
The non-GAAP adjusted EBITDA loss was $5.5 million for Q4 2024, compared to positive adjusted EBITDA of $3 million in the same period in 2023, partly due to investments in product development.
Institutional Revenue Pressure
Institutional revenue was impacted by a cautious government funding environment and lower bookings, leading to a projected flat year-over-year performance in this segment.
Company Guidance
During Nerdy's Fourth Quarter 2024 Earnings Call, guidance was provided for fiscal year 2025, highlighting several key metrics and strategic initiatives. The company reported a fourth-quarter revenue of $48 million, exceeding its guidance range of $44 million to $47 million, despite a 13% year-over-year decrease. For the full year 2025, Nerdy anticipates revenue between $190 million and $200 million, with adjusted EBITDA expected to range from negative $8 million to negative $18 million. The company aims to achieve positive adjusted EBITDA and cash flow by the fourth quarter of 2025. Key drivers of growth include improvements in consumer revenue, underpinned by a 20% price increase and enhanced user experience due to AI-driven products. These AI tools, such as session playback and lesson plan generators, have already demonstrated a 99% positive feedback rate and higher engagement. Institutional revenue is projected to remain flat initially due to a cautious government funding environment, but it is expected to return to growth in the second half of the year as product enhancements are introduced. With cash and cash equivalents of $52.5 million and no debt, Nerdy plans to leverage AI to drive productivity improvements, aiming to scale without increasing headcount in most areas.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.