What Happened?
Shares of online learning platform Coursera (NYSE: COUR) fell 12.9% in the afternoon session after its weak fourth-quarter profitability forecast overshadowed an otherwise strong third-quarter earnings report.
The company surpassed market expectations for its third quarter, reporting revenue of $194.2 million and an adjusted EPS of $0.10, both beating analyst estimates. Additionally, Coursera's revenue guidance for the upcoming fourth quarter was better than expected at $191 million at the midpoint. However, investors focused on the company's weaker outlook for profitability. Coursera's guidance for fourth-quarter adjusted EBITDA, a key measure of profitability, was $8.5 million at the midpoint, well below the consensus estimate of $10.17 million. This shortfall suggested potential pressure on margins, spooking investors and leading to a significant sell-off despite the positive top-line performance.
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What Is The Market Telling Us
Coursera’s shares are very volatile and have had 20 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 previous big move we wrote about was 4 days ago when the stock gained 3.5% on the news that investment firm Needham reiterated its Buy rating and $14.00 price target on the stock. The firm's decision came ahead of the company's third-quarter earnings report. Needham's confidence was based on Coursera's stronger-than-expected second quarter, which saw accelerated growth in both its consumer and enterprise segments. The firm also highlighted the company's recent partnership with OpenAI, viewing it as an attractive opportunity to bring new users to the platform.
Coursera is up 8.5% since the beginning of the year, but at $9.20 per share, it is still trading 27.5% below its 52-week high of $12.70 from August 2025. Investors who bought $1,000 worth of Coursera’s shares at the IPO in March 2021 would now be looking at an investment worth $204.56.
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