On Friday, Needham reaffirmed its optimistic stance on Coursera Inc (NYSE:COUR), maintaining a Buy rating and a $15.00 price target. The endorsement follows Coursera's robust performance in the second quarter of 2024, which surpassed expectations, and a forecast for the fiscal year that the firm regards as cautious.
Coursera's second-quarter success was largely attributed to an increase in international learners in the Consumer segment and an acceleration in growth within the Degrees segment, spurred by strong enrollment numbers. Despite management's conservative guidance for the full year, Needham sees potential for significant growth in the latter half of 2024.
The firm anticipates that Coursera's record launch of 16 new professional certificate programs in the second quarter will contribute to further growth in the Consumer segment. Additionally, the launch of new Degree programs is expected to fulfill management's projections for a substantial increase in the Degrees segment during the second half of the year.
Needham also predicts that any increase in revenue will likely be accompanied by a rise in EBITDA. The firm's confidence in the stock remains strong, with an endorsement to buy on strength, noting that Coursera's shares were indicated to rise more than 15% in pre-market trading.
In other recent news, Coursera reported robust Q2 results, with revenue rising to $170.3 million, an 11% increase year-over-year. The online learning platform saw a significant uptick in enrollments and the introduction of AI-powered innovations such as Coursera Coach and Course Builder.
Despite these positive developments, Goldman Sachs maintained a Sell rating on the shares, reducing the 12-month price target from $10.50 to $9.00. This decision followed Coursera's Q2 earnings report, which showed a sustained Enterprise Retention rate below 100%. However, the company received positive remarks on its content publication and distribution efforts.
Looking forward, Coursera reaffirmed its full-year 2024 outlook for revenue and Adjusted EBITDA, with Q3 revenue projected to be between $171 million and $175 million.
InvestingPro Insights
As Coursera Inc (NYSE:COUR) captures attention with its second-quarter performance and Needham's positive outlook, it's worth considering additional insights from InvestingPro. The company's proactive approach to capital management is evident as management has been aggressively buying back shares, signaling confidence in the company's intrinsic value. Moreover, with more cash than debt on its balance sheet, Coursera stands on solid financial ground, an essential factor for investors gauging the company's ability to navigate through uncertain economic times.
InvestingPro data highlights a 19.28% revenue growth in the last twelve months as of Q1 2024, complementing the strong enrollment numbers reported by Coursera. While the company has not been profitable over the last twelve months, analysts predict profitability this year, which could be a turning point for investor sentiment. Additionally, despite recent price volatility, Coursera's stock has shown a strong return over the last month, offering a glimmer of resilience amidst broader market fluctuations.
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