How Softer Spend Per User and Slower Sales Growth At Coursera (COUR) Has Changed Its Investment Story

• Recently, Coursera reported that average customer spending fell by 7.3% as it prioritized expanding its user base in a highly competitive market, with sales growth over the next 12 months estimated at 6%, below its three-year trend.
• This combination of lower spend per customer and an expected moderation in overall sales growth raises questions about how effectively Coursera can balance scale with profitability over time.
• We’ll now examine how the 7.3% drop in average customer spending may influence Coursera’s broader investment narrative and growth outlook.

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Coursera Investment Narrative Recap

To own Coursera, you need to believe that scale in online learning can eventually translate into sustainable profits, even if the company is not yet profitable. The 7.3% drop in average customer spending and a projected 6% sales growth over the next year sharpen the focus on its biggest near term risk: whether adding more users at lower spend can still move Coursera closer to breakeven without eroding its pricing power.

The recent integration of Coursera content into ChatGPT, making courses more discoverable to hundreds of millions of users, is particularly relevant here. It supports the key short term catalyst of expanding the learner funnel globally, which may help offset weaker spend per customer if Coursera can eventually convert a larger share of this traffic into paying users.

But despite this broader reach, investors should be aware that...

Read the full narrative on Coursera (it's free!)

Coursera's narrative projects $859.8 million revenue and $100.5 million earnings by 2028. This requires 6.0% yearly revenue growth and a $151.4 million earnings increase from -$50.9 million today.

Uncover how Coursera's forecasts yield a $12.23 fair value, a 49% upside to its current price.

Exploring Other Perspectives

Four members of the Simply Wall St Community currently estimate Coursera’s fair value between US$12.23 and US$15.00, highlighting a wide spread of views. Against this, the recent drop in average customer spending raises fresh questions about Coursera’s ability to grow revenue without sacrificing pricing power, so it is worth comparing several of these perspectives before deciding how this risk could influence the company’s long term performance.

Explore 4 other fair value estimates on Coursera - why the stock might be worth as much as 83% more than the current price!

Build Your Own Coursera Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Coursera research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.
• Our free Coursera research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Coursera's overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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