Why Coursera (COUR) Stock Is Trading Up Today
Shares of online learning platform Coursera (NYSE:COUR) jumped 11.5% in the morning session after the company reported a "beat and raise" quarter. Second quarter results exceeded Wall Street's revenue, adjusted EBITDA and earnings per share expectations. Notably, EPS exceeded expectations by a whopping 27%. Management attributed the strong topline growth to "differentiated value of our branded, job-relevant credentials to learners and institutions around the world." These include courses offered by top institutions such as Google and Microsoft to help learners develop skills in fields such as cloud and AI.Moving ahead, the company raised revenue and adjusted EBITDA guidance for the full year, surpassing Consensus. Similarly, revenue guidance for the next quarter also beat. Following the results, analyst Brett Knoblauch, of Cantor Fitzgerald released a research report in which he raised the stock's rating from Neutral (Hold) to Overweight (Buy) and the target price from $13 to $17. The price target implied a potential 30% upside from where shares were traded when the report was released.Overall, it was a really good quarter with ample reasons for shareholders to remain optimistic.
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What is the market telling us:
Coursera's shares are somewhat volatile and over the last year have had 27 moves greater than 5%. But moves this big are very rare even for Coursera and that is indicating to us that this news had a significant impact on the market's perception of the business. The previous big move was three months ago, when the stock gained 7.35% on the news that the company reported first-quarter results that surpassed analysts' revenue and earnings per share expectations. In addition, revenue guidance for the next quarter and full year also topped the consensus estimates. Stocks generally react positively to strong earnings performance, so this quarter's earnings should result in broad increases in financial projections for the company.
Coursera is up 18.5% since the beginning of the year, but at $14.62 per share it is still trading 10.2% below its 52-week high of $16.28 from February 2023. Investors who bought $1,000 worth of Coursera's shares at the IPO in March 2021 would now be looking at an investment worth $325.33.
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