What Happened?

Shares of online learning platform Coursera (NYSE:COUR) fell 12.7% in the afternoon session after the company reported underwhelming fourth quarter results. Its revenue and EBITDA guidance for the next quarter fell short of Wall Street's estimates. Growth has been weak in recent quarters, yet management offered no clear guidance for 2025. Instead, management expects the business to record positive overall growth in the year and plans to provide more detailed guidance in the coming months. Investors found this unconvincing, and the stock is down as a result. Separately, the company announced that Greg Hart will take over as President and CEO, succeeding Jeff Maggioncalda, who will retire, effective February 3, 2025.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Coursera? Access our full analysis report here, it’s free.

What The Market Is Telling Us

Coursera’s shares are quite volatile and have had 18 moves greater than 5% over the last year. But moves this big are rare even for Coursera and indicate this news significantly impacted the market’s perception of the business. 

The biggest move we wrote about over the last year was 6 months ago when the stock gained 54.9% on the news that the company reported strong second-quarter earnings. Coursera increased its number of users. Its revenue and adjusted EBITDA also outperformed Wall Street's estimates. Notably, sales across all major operating segments exceeded Wall Street's estimates, and the company surpassed two million enrollments for its generative AI courses. That the company maintained full-year guidance for revenue, and adjusted EBITDA means it's squarely on track. Overall, this quarter was solid.

Coursera is down 0.5% since the beginning of the year, and at $8.44 per share, it is trading 57.5% below its 52-week high of $19.87 from January 2024. Investors who bought $1,000 worth of Coursera’s shares at the IPO in March 2021 would now be looking at an investment worth $187.44.

Today’s young investors likely haven’t read the timeless lessons in Gorilla Game: Picking Winners In High Technology because it was written more than 20 years ago when Microsoft and Apple were first establishing their supremacy. But if we apply the same principles, then enterprise software stocks leveraging their own generative AI capabilities may well be the Gorillas of the future. So, in that spirit, we are excited to present our Special Free Report on a profitable, fast-growing enterprise software stock that is already riding the automation wave and looking to catch the generative AI next.