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Nerdy (NRDY)
NYSE:NRDY
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Nerdy
(NYSE:NRDY)
Rating:48Neutral
Price Target:―
Positive Factors
AI Tools and Engagement
Nerdy's AI tools are enhancing frequency and engagement amongst new learners, leading to higher usage and a 99% positive feedback rate from parents and students.
Financial Performance
Nerdy's revenue and adj. EBITDA came in better than consensus estimates.
Valuation
Shares are trading at just 1.2 times the FY25 sales estimate, indicating value at the current price.
Negative Factors
Institutional Revenue Decline
Institutional revenue is expected to be around 15% of revenue in 2025, down from approximately 18% in 2024, as Nerdy shifts focus toward monetization for new institutional customers.
Macro/Regulatory Uncertainty
Macro/regulatory uncertainty has the potential to pressure both consumer and institutional budgets in 2025.
Q4 Guidance
Nerdy expects Q4 revenue of $44-47M, down 15-20% y/y and well below consensus of $57M, reflecting lower active members entering the quarter due to higher cancellations of older cohorts of lower frequency memberships.
Nerdy (NRDY) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$298.34M
Dividend YieldN/A
Average Volume (3M)591.31K
Price to Earnings (P/E)―
Beta (1Y)1.73
Revenue Growth-1.64%
EPS Growth9.99%
CountryUS
Employees600
SectorTechnology
Sector Strength76
IndustrySoftware - Application
Share Statistics
EPS (TTM)-0.09
Shares Outstanding119,768,265
10 Day Avg. Volume783,629
30 Day Avg. Volume591,307
Financial Highlights & Ratios
PEG Ratio0.49
Price to Book (P/B)4.49
Price to Sales (P/S)0.00
P/FCF Ratio-12.43
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$2.08Price Target Upside34.19% Upside
Rating ConsensusHold
Number of Analyst Covering7
Nerdy Business Overview & Revenue Model
Company DescriptionNerdy, Inc. operates platform for live online learning. The company's purpose-built proprietary platform leverages technology, including AI, to connect learners of various ages to experts, delivering value on both sides of the network. Its learning destination provides learning experiences across various subjects and multiple formats, including one-on-one instruction, small group classes, large format group classes, and adaptive self-study. The company's flagship business, Varsity Tutors, operates platforms for live online tutoring and classes. Its solutions are available directly to learners, as well as through schools and other institutions. The company was founded in 2007 and is headquartered in Saint Louis, Missouri.
How the Company Makes MoneyNerdy makes money through a multi-faceted revenue model centered around its online learning platform, Varsity Tutors. The company generates revenue primarily from direct-to-consumer sales, where students or their parents pay for tutoring sessions, classes, and courses. These services are offered on a subscription basis or as one-time purchases. Additionally, Nerdy partners with educational institutions and businesses to provide tailored learning solutions and professional development programs, creating additional revenue streams. Other significant factors contributing to Nerdy's earnings include the scalability of its platform, which allows it to reach a broad audience, and strategic partnerships that expand its market presence and enhance its offerings.
Nerdy Financial Statement Overview
Summary
Nerdy shows strong revenue growth and a solid cash position, but struggles with profitability and negative cash flows. The balance sheet is stable with no debt and improved equity, but cash flow issues need addressing for long-term growth.Income Statement
Nerdy's income statement shows a consistent increase in revenue over the years, indicating growth potential, with a revenue growth rate of 16.3% from 2020 to 2021 and 18.1% from 2019 to 2020. However, the company is struggling with profitability, as shown by negative EBIT and net profit margins. The gross profit margin in 2024 was approximately 67.5%, but the net profit margin remains negative due to significant losses.45
Neutral
Balance Sheet
The balance sheet indicates Nerdy has consistently maintained a strong cash position with no debt as of 2024, which is a positive sign of financial stability. Despite this, the company has faced challenges in sustaining positive equity. The debt-to-equity ratio is not applicable in 2024 due to zero debt, but the equity ratio has improved to about 42.7%, reflecting a strengthened balance sheet.50
Neutral
Cash Flow
Nerdy's cash flow statements reveal negative operating and free cash flows, indicating difficulties in generating cash from its core operations. The free cash flow to net income ratio is negative, showing reliance on external funding. This presents a challenge for future liquidity and investment capabilities.40
Negative
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 190.23M | 193.40M | 162.66M | 140.66M | 103.97M | Gross Profit |
| 128.39M | 136.45M | 112.93M | 93.96M | 69.13M | EBIT |
| -70.11M | -57.57M | -90.81M | -93.44M | -17.93M | EBITDA |
| -70.11M | -50.80M | -87.67M | -93.44M | -13.72M | Net Income Common Stockholders |
| -42.59M | -40.17M | -63.91M | -30.68M | -27.74M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 52.54M | 74.82M | 90.72M | 143.96M | 29.27M | Total Assets |
| 92.51M | 124.74M | 132.69M | 177.15M | 57.27M | Total Debt |
| 928.00K | 4.67M | 1.53M | 841.00K | 47.58M | Net Debt |
| -51.61M | -73.51M | -89.19M | -143.12M | 18.31M | Total Liabilities |
| 31.39M | 39.14M | 51.64M | 81.34M | 455.74M | Stockholders Equity |
| 39.48M | 52.48M | 46.93M | 50.66M | -398.46M |
| Cash Flow | Free Cash Flow | |||
| -22.47M | -14.45M | -53.32M | -44.05M | -9.53M | Operating Cash Flow |
| -15.60M | -7.56M | -48.00M | -38.89M | -6.65M | Investing Cash Flow |
| -6.86M | -6.89M | -5.32M | -5.16M | -2.87M | Financing Cash Flow |
| 0.00 | -1.94M | -1.00M | 159.25M | 12.29M |
Nerdy Technical Analysis
Negative
1.55
Price Trends
1.55
Positive
1.63
Negative
1.39
Positive
Market Momentum
0.03
Positive
44.92
Neutral
45.61
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For NRDY, the sentiment is Negative. The current price of 1.55 is below the 20-day moving average (MA) of 1.65, above the 50-day MA of 1.55, and above the 200-day MA of 1.39, indicating a neutral trend. The MACD of 0.03 indicates Positive momentum. The RSI at 44.92 is Neutral, neither overbought nor oversold. The STOCH value of 45.61 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for NRDY.
Nerdy Risk Analysis
Nerdy disclosed 56 risk factors in its most recent earnings report. Nerdy reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 2 New Risks
1.
Our failure to meet the New York Stock Exchange's continued listing requirements could result in a delisting of our Class A Common Stock. Q4, 2024
2.
We rely on our new and existing Learners to drive utilization and to generate revenue, and if we fail to attract and retain Learners our business and operating results will suffer. Q4, 2024
Nerdy Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $2.13B | 17.74 | 18.83% | ― | 8.74% | 150.66% | |
68 Neutral | $1.61B | 209.03 | 2.81% | ― | 22.75% | -47.45% | |
63 Neutral | $3.17B | ― | -11.33% | ― | 26.55% | 38.37% | |
63 Neutral | $1.29B | ― | -6.49% | ― | 5.15% | 28.27% | |
63 Neutral | $1.59B | ― | -32.87% | ― | 8.56% | -4.21% | |
60 Neutral | $11.56B | 10.24 | -7.04% | 2.94% | 7.46% | -10.54% | |
48 Neutral | $298.34M | ― | -104.69% | ― | -1.64% | 9.99% |
* Technology Sector Average
Performance Comparison
NRDY
Nerdy
1.55
-0.28
-15.30%
SEMR
SEMrush Holdings
9.84
-5.99
-37.84%
ALKT
Alkami Technology
29.21
2.28
8.47%
CXM
Sprinklr
8.05
-3.94
-32.86%
MLNK
MeridianLink
16.07
-2.92
-15.38%
AMPL
Amplitude
12.31
2.88
30.54%
Nerdy Earnings Call Summary
Earnings Call Date:May 08, 2025
(Q1-2025)
| % Change Since: -4.91%|
Next Earnings Date:Aug 06, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted significant progress in product innovation, price optimization, and efficiency improvements, particularly with the introduction of AI features and increased ARPM. However, challenges remain with year-over-year revenue decline, reduced gross margins, and uncertainties in Institutional funding. The company is on track for profitability, contributing to an overall balanced outlook.Q1-2025 Updates
Positive Updates
Increased Average Revenue per Member
Average Revenue per Member per Month (ARPM) increased to $335, a 14% improvement year-over-year, indicating a positive shift in revenue quality.
Successful Consumer Price Increases
Higher ARPM due to price increases and a shift to higher frequency Learning Memberships contributed to stronger revenue performance.
AI Product Innovations
Introduction of AI-driven features such as AI session insights and Tutor Copilot enhanced learning experiences and customer engagement.
Strong Institutional Bookings
Varsity Tutors for Schools executed 90 contracts, yielding $4 million in bookings, demonstrating interest in the Live + AI platform.
Cost Reductions and Efficiency Gains
Reduced headcount by about 16% and improved marketing efficiency, leading to lower sales and marketing expenses.
Positive Trajectory for Profitability
Company expects to become adjusted EBITDA and operating cash flow positive in Q4 2025.
Negative Updates
Year-over-Year Revenue Decline
Quarterly revenue of $47.6 million represented an 11% decrease year-over-year due to lower Learning Memberships and Institutional revenue.
Reduced Gross Margin
Gross margin decreased to 58% from 68% year-over-year, primarily due to tutor incentives and higher session utilization.
Institutional Funding Uncertainties
Cautious funding environment at federal and state levels could impact future Institutional revenue growth.
Adjusted EBITDA Loss
Reported a non-GAAP adjusted EBITDA loss of $6.4 million for Q1 2025, compared to a slight positive adjusted EBITDA in the previous year.
Company Guidance
During the Nerdy, Incorporated Q1 2025 earnings call, the company provided guidance that highlighted several key financial metrics and operational strategies. Nerdy reported revenue of $47.6 million for the first quarter, exceeding their guidance range of $45 million to $47 million, despite a year-over-year decline of 11%. The Average Revenue per Member per Month (ARPM) increased to $335, reflecting a 14% year-over-year improvement. The company also noted a significant improvement in customer retention, driven by increased consumer pricing and a shift towards higher frequency Learning Memberships. Gross margins were lower at 58%, down from 68% the previous year, primarily due to investments in tutor incentives. However, Nerdy expects gross margins to improve sequentially throughout 2025 as the mix shifts towards higher-priced new Consumer customers. The company anticipates ending the year with an ARPM above $370 and becoming adjusted EBITDA and operating cash flow positive by the fourth quarter. Additionally, Nerdy highlighted its strategic focus on AI-driven product innovations, such as AI session summaries and Tutor Copilot, which are designed to enhance learner engagement and operational efficiency.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.