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Coursera Inc(COUR-N)

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Why Coursera Stock Was Tumbling Today

Motley Fool - Fri Feb 10, 2023

What happened

Shares of Coursera (NYSE: COUR) were pulling back Friday after the online education company posted a disappointing fourth-quarter report that missed estimates on the bottom line, and management offered weak guidance for the first quarter.

As of 3:20 p.m. ET, the stock was down 8.2%.

So what

Revenue in the fourth quarter rose 24% to $142.2 million, topping analysts' consensus expectations of $138.1 million. The company posted solid growth in its consumer and enterprise segments, reflecting demand for professional certificates and a 43% increase in enterprise customers to 1,149.

On the bottom line, its margins improved slightly, but it still lost $5.8 million in adjusted EBITDA. On a GAAP basis, it reported a loss of $0.35 per share compared to a $0.34 per share loss in the quarter a year ago, and estimates for a loss of $0.12 per share.

Following the report, Cantor Fitzgerald downgraded the stock from neutral to overweight. Analyst Brett Knoblauch called the fourth-quarter results "solid," but said the risk/reward dynamic was less appealing with shares up more than 30% year to date coming into the report, and with revenue guidance indicating a significant deceleration in 2023.

Now what

For the first quarter, the company expects revenue in the range of $136 million to $140 million, below analysts' consensus estimate of $142.8 million. That would amount to growth of 15% at the midpoint. Management also expects an adjusted EBITDA loss of $12.5 million to $15.5 million.

For the full year, management forecast revenue would grow by about 15% to somewhere in the $595 million to $605 million range. The analysts' consensus estimate was $618.5 million. Coursera also guided for an adjusted EBITDA loss of $26 million to $34 million for 2023, which would be just a slight improvement from 2022.

Given the weaker-than-expected guidance and the continued losses on the bottom line, it's not surprising that the stock was trading lower on Friday.

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Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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