We came across a bullish thesis on Coursera, Inc. (COUR) on Substack by Unemployed Value Degen. In this article, we will summarize the bulls’ thesis on COUR. Coursera, Inc. (COUR)’s share was trading at $8.03 as of Feb 21st. COUR’s forward P/E was 21.69 according to Yahoo Finance.
A student interacting with their professor in an online learning environment.
Coursera’s latest earnings call delivered modest growth across its three segments, ranging from 5% to 14%, with a small positive adjusted EBITDA but a negative GAAP net income. The standout 14% year-over-year growth came from a segment with 100% margins—tuition share from universities eager to establish an online presence through Coursera’s turnkey solution. With further expansion, Coursera could outpace the drag of stock-based compensation, a common issue among tech stocks. Contrary to concerns about AI disrupting its business, Coursera is integrating AI micro-credentials for entry-level job certifications, positioning itself well for future growth. The key catalyst for a major stock rerating is an eventual inflection to GAAP profitability, though the timeline remains uncertain.
A significant development is the appointment of Greg Hart as CEO in February 2025. Hart, who spent 23 years at Amazon, brings experience that could enhance Coursera’s growth and innovation trajectory. The sudden departure of former CEO Jeff Maggioncalda, who led for seven years, remains unexplained, but co-founder and chairman Andrew Ng continues to provide continuity. The length of a typical executive search suggests this transition was planned well in advance, likely signaling a strategic shift rather than a response to scandal or internal conflict. In contrast to Kohl’s, where a mismanaged CEO transition hurt the company, Coursera appears to have a well-structured leadership change, raising optimism for improved execution under Hart’s leadership.
Given the unpredictability of tech winners, diversification remains key but under an efficient CEO, Coursera could achieve the “Rule of 40,” where growth and margins exceed 40%, supporting a price-to-sales multiple above 4.0x. With effective execution, Coursera’s stock could reach $17.68 by the end of 2026.
Coursera, Inc. (COUR) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 28 hedge fund portfolios held COUR at the end of the third quarter which was 21 in the previous quarter. While we acknowledge the risk and potential of COUR as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than COUR but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article was originally published at Insider Monkey.