Why Coursera Stock Plummeted Today
Key Points
Coursera posted a modest sales beat in Q1, but earnings came in below expectations.
Coursera's results weren't dramatically worse than Wall Street's targets, but investors are wondering what AI means for the business.
Coursera (NYSE: COUR) ended Friday's trading deep in the red. The education services company's share price ended the session down 11.6% even though the S&P 500 gained 0.8% and the Nasdaq Composite gained 1.6%.
Coursera published its first-quarter results after the market closed yesterday, and the market had a negative reaction to the print. With the pullback today, the stock is now down roughly 28% year to date.
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Coursera stock sinks on earnings miss
Coursera reported non-GAAP (adjusted) earnings of $0.07 per share on sales of $195.7 million in Q1. While sales in the period topped the consensus estimate by roughly $0.6 million, earnings per share fell $0.01 short of the market's target. Results in the period weren't terrible, but the weaker-than-expected earnings added to concerns that the business could face softer pricing power and disruption from artificial intelligence (AI).
What's next for Coursera?
With its Q1 report, Coursera reaffirmed guidance for sales to come in between $805 million and $815 million this year. Hitting the midpoint of that guidance range would mean delivering annual growth of roughly 7% over the $757 million in sales the business recorded last year.
Coursera continues to enjoy the benefits of an entrenched customer base, and the company has its own opportunities to use AI to adapt to shifts in the competitive landscape. The company's Q1 results and forward guidance weren't terrible, and it's possible that investors are overreacting to the print.
Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.