Coursera Stock Plummets Despite Strong Q3 Results

Coursera shares plunged after reporting Q3 2024 results exceeding expectations. The unexpected lowering of annual revenue guidance amid signs of weak consumer demand caused confusion, leading to a stark sell-off. Investors may need to reevaluate the stock's potential.

Date: 25-10-2024

AI Rating: 5

The report indicates that Coursera (NYSE: COUR) experienced a significant decline in stock price despite reporting better-than-expected Q3 2024 financial results. The company's revenue for Q3 was $176 million, exceeding the management's guidance of up to $175 million. Furthermore, Coursera reported an adjusted EBITDA of $13.3 million, which greatly surpassed the low end of the previous guidance set at $4 million.

However, the decline in stock price was attributed to the company's decision to lower its annual revenue guidance. The new guidance suggests a revenue range of $690 million to $694 million, down from a prior estimate of $695 million to $705 million. This reduction surprised investors, especially in light of the outperformance in Q3. The report notes that the management cites weak consumer demand as a significant factor in this decision, which has led to concerns regarding retention trends.

Despite the disappointing outlook, there were some positive notes within the report. The enterprise revenue for Q3 increased by 10% year-over-year, indicating strength in this area of the business. Moreover, management raised its full-year EBITDA expectations, which implies that profitability is progressing ahead of schedule.

In conclusion, while the revenue forecast reduction raises concerns, the overall performance in Q3 seems positive. Therefore, investors may want to reassess the stock, considering it could represent a buying opportunity after the sharp decrease in stock price.

Stocks: COUR