How are energy investors positioned?
On Thursday, Morgan Stanley (NYSE:MS) analysts downgraded Coursera Inc (NYSE: NYSE:COUR) stock from Overweight to Equalweight. The analysts set a new price target of $11.00, up from the previous target of $10.00.
The analysts noted that about a year ago, Coursera’s shares were seen as an attractive entry point, trading at 1x gross profit. The shares had been penalized following a disappointing first quarter in 2024. Despite improvements in execution and fundamentals being better than feared, the valuation appears more balanced now. Coursera trades at 2.4x EV/CY26 gross profit.
Several factors contributed to the downgrade. These include headwinds from the de-emphasis of the Degree business, challenges in the Enterprise segment with a 91% net revenue retention (NRR), and modest margin expansion despite mid-single-digit top-line growth.
The analysts acknowledged Coursera’s premium valuation over Udemy, citing stronger growth prospects, differentiation, branded content, and a robust portfolio of consumer solutions as justifications. However, they expressed uncertainty about the valuation gap meaningfully increasing.
In other recent news, Coursera Inc. reported its first-quarter 2025 earnings, which surpassed expectations. The company achieved earnings per share of $0.12, exceeding the forecasted $0.08, and generated revenue of $179 million, surpassing the anticipated $175.58 million. This marks a 6% year-over-year revenue increase, highlighting Coursera’s successful strategies in expanding its course catalog and technological offerings. Additionally, Coursera announced the appointment of Patrick Supanc as its new Chief Product Officer, a strategic move aimed at driving product innovation. Supanc, with a robust background in product development from Amazon (NASDAQ:AMZN), Pearson (LON:PSON), and Blackboard, is expected to enhance Coursera’s product strategy. Coursera also launched several AI-driven products and services, reflecting its focus on innovation and the growing demand for job-relevant skills. The company projects full-year 2025 revenue to be between $720 and $730 million, with a growth rate of 4-5%. Lastly, Coursera has recently simplified its segment reporting by integrating its degrees product into the consumer segment, indicating a streamlined approach to its business operations.
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