Coursera’s Mixed Performance: Strong Financials Amidst Segment Challenges and Macroeconomic Pressures Justify Hold Rating

Morgan Stanley analyst Josh Baer maintained a Hold rating on Coursera today and set a price target of $12.00.

Josh Baer has given his Hold rating due to a combination of factors influencing Coursera’s performance. While the company reported a strong quarter with revenue and EBITDA surpassing expectations, and free cash flow reaching record levels, there are still challenges that prevent a more optimistic outlook. The Consumer segment showed robust growth, and the Enterprise segment is improving, but the Degree segment faces headwinds, and the Enterprise net revenue retention remains in the low-to-mid 90% range.
Despite the positive financial results and raised guidance for FY25, the broader macroeconomic environment poses challenges, particularly for learning and development budgets. These factors suggest that while Coursera is making progress, it may not yet be positioned for a significant re-rating in the near term, justifying the Hold rating.

In another report released today, Bank of America Securities also upgraded the stock to a Hold with a $12.00 price target.