Coursera Should Be Profitable Over Time Given Scalable Nature Of Its Learning Platform, Analyst Says

BMO Capital Markets analyst Jeffrey M. Silber initiated coverage on Coursera Inc COUR at an Outperform rating with a price target of $24. 

The analyst expects COUR's strong revenue growth to continue through its flywheel approach and benefit from secular drivers such as upskilling, international expansion, and digital transformation. 

Although the company is not yet profitable, the analyst believes it can grow over time on the scalable nature of its learning platform.

The analyst notes management's expectation of achieving a 19% CAGR across its total addressable market to reach $309 billion in 2026 and 25%-30% revenue growth in the long term.

Although the analyst's long-term revenue growth expectations are below the company's guided range, he sees continued strong top-line growth.

Also, the analyst believes the company may take time to reach its long-term margin target of 15%-20% (to be achieved through product mix, paid offerings and higher operating expense leverage) but expects continued margin expansion going forward.

The analyst estimates revenue of $713 million and EPS of $0.06 (vs. consensus of $0.03) in FY24.

Price Action: COUR shares are trading lower by 1.84% at $18.65 on the last check Thursday.