The stock value of online education platform Coursera is continuously sinking, and AI implementation and the announcement of its first quarter earnings also did not meet expectations. Its stock has fallen more than 100% year to date.
Coursera stock is priced at $8.96
The rapid rise of AI apps like ChatGPT also seems to be taking a toll on the stock performance of online education firms. The company has also lowered its target for the second quarter as consensus expectations for the second quarter were $178 million, which now the company has said to be somewhere between $162 million and $166 million.
Coursera’s earnings per share (EPS) exceeded Wall Street expectations as they were $0.07 per share, which were expected to be $0.00, but despite better EPS, the company’s revenue came up by $1.3 million, which was $169.1 million.
The company has attained a 15% year-on-year increase in revenue, but it is facing problems with the slow adoption of its AI platform, which was introduced just recently, along with stiffness in the North American market.
The online education giant is expecting year-round revenue to be between $695 million and $705 million, which is also less than expected annual revenue, which was above $736 million. The anticipated earnings before depreciation, amortization, and tax for the second quarter are in a range of -$2 million to $2 million.
Analysts still expect a target price of at least $10.5
Many investors are still optimistic about Coursera, but some market analysts have reduced their price targets for the company. On April 26, RBC Capital Markets lowered its price target from $25 to $18 but maintained its outperform rating.
Goldman Sachs rated the stock as a sell option and also dropped the COUR price target from $15 to $10.5, but it expects that demand may increase in the near term.
Jeffrey Silber of BMO Capital also raised the price target from $20 to $13 but has kept a buy recommendation for the stock. Despite the fact that Coursera stock is down at $8.96 today, the average price target for the company’s stock is above $16, which is almost 80 percent above the current price.
In the long term, the stock price will depend on multiple factors, especially how the company leverages its AI implementation strategy, which it is still struggling with from a consumer adoption point of view, despite the fact that the company has also benefited from the higher demand for professional entry-level certificates from Microsoft, Google, and IBM.