'A COUR Growth Idea To Own': Analysts Initiate Coverage Of Coursera

Coursera Inc COUR shares are up significantly since the company priced its late-March IPO at $33.

The California company works with more than 200 universities to offer online courses and certifications. A boom in online education during the COVID-19 pandemic sent Coursera’s revenue skyrocketing from $184 million in 2019 to $294 million in 2020. Unfortunately, the company’s net losses also climbed from $47 million to $67 million last year.

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After pricing its IPO shares at the high end of its projected range, Coursera shares jumped 36% on their first day of trading, giving the company a $5.9 billion market cap. The stock is now trading at a nearly 50% premium to its IPO price, and the company will be facing some extremely difficult comps in coming quarters.

Several of Coursera’s IPO underwriters finally weighed in on the stock on Monday following the mandatory quiet period.

Education Revolution: Needham analyst Ryan MacDonald said Coursera is at the center of a coming digital skills revolution.

“With a number of growth drivers across the margin-accretive enterprise and degrees segments and what we view to be conservative assumptions across key metrics, we believe Coursera can outperform expectations, warranting multiple expansion from current levels,” MacDonald wrote.

KeyBanc analyst Jason Celino said the stock is “a 'COUR' growth idea to own.”

“We find Coursera's content synergies and cost leadership, sizable international footprint, and growth opportunities in its Degrees business to be most compelling,” Celino wrote.

Telsey Advisory Group analyst Sarang Vora said Coursera is transforming the education industry.

“We believe Coursera, an online education platform, is in the early stages of multi-year global expansion supported by the industry shift toward online education and its unique business model that attracts learners via a freemium approach, followed by upselling premium content through a revenue share partnership with content providers,” Vora wrote.

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Attractive Growth, Stretched Value: Morgan Stanley analyst Josh Baer said he sees a clear path to 25% long-term annual revenue growth.

“Coursera's strong Consumer platform positions the company to scale its Enterprise and Degrees segments, addressing some of the fastest-growing portions of the multi-trillion $ global education market,” Baer wrote.

Raymond James analyst Brian Peterson said Coursera is an education trailblazer, but its valuation leaves little room for near-term upside.

“The company’s 34% jump since the IPO values shares at 14x our CY22 revenue estimate, well above the learning-oriented names and roughly in-line with SaaS assets in the 20-30% growth range (14.6x),” Peterson wrote.

Ratings And Price Targets:

• Needham has a Buy rating and a $56 target.
• KeyBanc has an Overweight rating and a $54 target.
• Telsey has an Outperform rating and a $58 target.
• Morgan Stanley has an Overweight rating and a $55 target.
• Raymond James has a Market Perform rating.

(Photo: Coursera)