Goldman Sachs continues to sell Coursera stock amid revenue challenges, AI focus

On Tuesday, Goldman Sachs revised its outlook Coursera Inc (NYSE: ) stock, lowered its price target to $10.50 from $15.00 previously, while maintaining a sell rating. The adjustment comes after the company released its first-quarter 2024 earnings report, which highlighted several key points influencing the company's decision-making.

Coursera's first-quarter revenue missed expectations, and management expects that trend to continue, as indicated in their forward-looking statements and guidance. There are many reasons for this gap, including lower user pipeline conversion rates, delays in content release, and continued weakness in the enterprise environment.

In addition, the company's net revenue retention rate declined from the previous quarter, from 98% to 94%, reflecting continued challenges with corporate spending levels.

Despite revenue challenges, Coursera management remains committed to exploring AI opportunities, emphasizing its potential role in platform positioning and content investments. The company is also committed to improving operating efficiency and reiterated its target of 4% adjusted EBITDA margin in 2024.

Expect investor discussion in the near term to focus on the potential for a recovery in demand across all of Coursera's market segments. This includes the impact of increased spending, marketing initiatives, new content releases and AI-driven projects.

Looking ahead, questions remain about how enterprises will adopt generative AI technology, the timing of adoption, and Coursera's role in this evolving landscape, which may also impact the consumer base.

Goldman Sachs reiterated its sell rating on Coursera after reviewing its latest earnings and management comments. The new 12-month price target of $10.50 reflects Goldman's assessment of the risks and rewards of the stock relative to the broader markets covered by the company.

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Investment Professional Insights

As Coursera Inc (NYSE: COUR) navigates a challenging period, it's important for investors to consider a variety of financial metrics and analyst insights.according to investment expert Data show that Coursera has a market value of approximately US$1.87 billion, and its revenue grew by 19.28% in the past 12 months as of the first quarter of 2024. The company is optimistic about profitability this year.

Judging from the company's stock performance, the stock price has dropped significantly in the past three months, with a drop of 37.88%. However, the relative strength index (RSI) suggests the stock is currently in oversold territory, which could signal a potential turning point to interested investors. It's also worth noting that Coursera holds more cash than debt on its balance sheet, providing a degree of financial stability.

For those considering investing in Coursera, these insights are available through the full suite of investment expert Tips, including 10 additional tips for comprehensive analysis.To gain access to these valuable insights, investors can use the coupon code PRONEWS24 Get an additional 10% discount on annual or two-year Pro and Pro+ subscriptions at InvestingPro.

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