On Tuesday, Truist Securities adjusted its outlook on Coursera Inc (NYSE: NYSE:COUR), decreasing the price target to $12.00 from the previous $20.00, while the Hold rating remains unchanged. The revision follows Coursera's first-quarter earnings report, which indicated a slight shortfall in revenue but exceeded expectations in terms of profits and cash flow compared to estimates.
The company highlighted challenges in its Consumer segment, particularly noting decreased volume and conversion rates of paying learners in North America. Additionally, a delay in content launch by an educational partner was cited as a contributing factor to the reduced revenue forecast for the fiscal year 2024. These issues are expected to pose ongoing challenges to the Consumer segment's revenue.
Coursera has set a consistent growth target of approximately 10% year-over-year for each of its business segments, which includes Consumer, Enterprise, and Degrees for the current year. Despite the downward revision in revenue expectations, the company still anticipates achieving an adjusted EBITDA (AEBITDA) margin of 4%.
The adjustment in Coursera's price target by Truist Securities is a direct response to the lower revenue and earnings projections. The firm's decision to maintain the Hold rating indicates a neutral stance on the stock's near-term movement, reflecting the latest financial outcomes and market conditions faced by Coursera.
InvestingPro Insights
In light of the recent financial analysis by Truist Securities, additional insights from InvestingPro can provide a broader perspective on Coursera Inc's (NYSE: COUR) current financial health and future prospects. Notably, Coursera holds more cash than debt on its balance sheet, which can be a sign of financial stability and may offer some resilience in challenging market conditions. Furthermore, analysts are optimistic about Coursera's potential for growth, with net income expected to increase this year and 10 analysts having revised their earnings upwards for the upcoming period.
InvestingPro Data reveals a market capitalization of $1.87 billion USD for Coursera, with a negative P/E ratio reflecting the company's current lack of profitability. However, revenue growth remains strong with a 19.28% increase over the last twelve months as of Q1 2024, suggesting that the company's top-line is expanding despite bottom-line challenges. Coursera's gross profit margin stands at a healthy 52.03%, indicating that the company is maintaining a solid profitability ratio on its core services and products.
For investors seeking a more in-depth analysis, InvestingPro offers additional tips and metrics, including an assessment of Coursera's stock being in oversold territory according to the RSI, and a projection that the company will become profitable this year. To access these insights and more, consider using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. With 11 more InvestingPro Tips available, investors can gain a comprehensive understanding of Coursera's financial landscape and make more informed decisions.
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