Shares of Coursera (COUR, Financial) fell by 8.92% to $6.94 after the company reported disappointing third-quarter earnings. Despite revenue slightly beating estimates and EBITDA exceeding expectations, the company lowered its full-year revenue guidance, falling short of Wall Street's expectations.
The decline was partly driven by weaknesses in the Enterprise segment, where the Net Retention Rate for Paid Enterprise Customers dropped to 89%, down from 93% in the previous quarter. Additionally, the Degrees segment's performance saw a quarter-over-quarter revenue decrease.
Coursera (COUR, Financial) is currently trading significantly below its intrinsic value, as suggested by its GF Value of $18.26, indicating that the stock is significantly undervalued. The company's market cap stands at approximately $1.09 billion, with a price-to-book (P/B) ratio of 1.86, which is relatively low compared to industry standards.
In terms of financial health, Coursera shows strong financial strength. However, there are concerns about profitability, highlighted by its negative return on equity (ROE) of -15.85% and a pretax margin of -13.73%. Despite these challenges, Coursera's cash-to-debt ratio of 292.15 suggests a solid ability to cover its debt obligations.
The stock's volatility is high, with a beta of 1.39, indicating that it is more volatile than the market. Investors should consider this alongside Coursera's status as a speculative growth stock within the small growth style box. The company's revenue has shown a positive trend, with a 3-year revenue growth rate of 23.2%.
Given these factors, investors may find Coursera (COUR, Financial) an attractive option at its current price, particularly if they believe in the long-term potential of the online education sector. However, they should also be aware of the risks associated with its current financial performance.
