Technology Driven Upskilling Will Expand Global Learning Markets

Key Takeaways

• Surging global demand for tech and job-relevant credentials, plus broad employer acceptance, is driving user growth and boosts revenue potential per learner.
  
• Expanding enterprise partnerships and innovative, AI-driven features are set to strengthen margins, user retention, and scalable international growth.
  
• Increased competition, partner dependency, and skepticism toward credentials threaten Coursera's revenue growth, margins, and ability to effectively monetize its user base.

Catalysts

Provides online educational services in the United States, Europe, Africa, the Asia Pacific, the Middle East, and internationally.

• The accelerating global need for technology-driven upskilling and reskilling continues to fuel new user growth and broadens Coursera's addressable market, as evidenced by record new learner additions and surging demand for AI, tech, and industry-specific credentials; this is likely to directly impact future top-line revenue expansion.
  
• Ongoing recognition and adoption of job-relevant micro-credentials (professional certificates, modular degrees, college credit pathways), coupled with growing acceptance from top employers and universities, suggest continued growth in both individual and institutional willingness to pay, supporting higher enrollment and average revenue per user (ARPU) over the long term.
  
• Expansion and deepening of enterprise partnerships-especially across business, government, and campus verticals-provide large-scale, recurring, and higher margin revenues; as these contracts mature and the enterprise customer base grows, net margins and earnings are positioned to improve further.
  
• Continuous product innovation, especially through AI-powered features like personalized tutoring (Coach), AI-driven catalog expansion, and advanced go-to-market strategies (localized pricing, onboarding enhancements), is expected to drive higher conversion rates, increase paid user retention, and boost engagement-positively influencing both revenue growth and margin leverage.
  
• Global localization efforts, such as AI translations and dubbing of thousands of courses into multiple languages, are accelerating platform adoption in emerging markets and enabling operating leverage as fixed costs are spread across a wider and more diverse user base, supporting higher operating margins and scalable earnings growth.

Coursera Future Earnings and Revenue Growth

Assumptions

• Analysts are assuming Coursera's revenue will grow by 6.0% annually over the next 3 years.
• Analysts are not forecasting that Coursera will become profitable in next 3 years. To represent the Analyst Price Target as a Future PE Valuation we will estimate Coursera's profit margin will increase from -7.1% to the average US Consumer Services industry of 11.7% in 3 years.
• If Coursera's profit margin were to converge on the industry average, you could expect earnings to reach $100.5 million (and earnings per share of $0.56) by about September 2028, up from $-50.9 million today.
• In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 26.9x on those 2028 earnings, up from -35.9x today. This future PE is greater than the current PE for the US Consumer Services industry at 20.4x.
• Analysts expect the number of shares outstanding to grow by 3.35% per year for the next 3 years.
• To value all of this in today's terms, we will use a discount rate of 7.07%, as per the Simply Wall St company report.

Coursera Future Earnings Per Share Growth

Risks

• Growing competition from low-cost or free alternatives and proliferation of open educational resources could exert downward pricing pressure, which may limit Coursera's ability to grow revenue and protect long-term gross margins and ARPU.
  
• Ongoing macroeconomic uncertainty and constrained corporate/education budgets, especially in the enterprise segment, may slow enterprise/government contract growth and place persistent pressure on topline revenues.
  
• Heavy reliance on university and industry partners for premium content introduces the risk that any deterioration in these relationships or universities' moves toward independent digital delivery could reduce Coursera's content differentiation and hamper long-term revenue growth.
  
• Persistently low conversion rates from free to paid users, despite top-of-funnel gains, could limit improvements in average revenue per user and stall profit growth if monetization strategies do not meaningfully advance.
  
• Credential inflation and growing employer/learner skepticism about the value of online micro-credentials may reduce willingness to pay for courses, negatively affecting both enrollment growth and consumer revenue over time.

Valuation

• The analysts have a consensus price target of $12.231 for Coursera based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $15.0, and the most bearish reporting a price target of just $9.0.
• In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $859.8 million, earnings will come to $100.5 million, and it would be trading on a PE ratio of 26.9x, assuming you use a discount rate of 7.1%.
• Given the current share price of $11.16, the analyst price target of $12.23 is 8.8% higher. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
• We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.