Is Coursera Still a Bargain After Its Latest AI Expansion News?

• Ever wondered if Coursera stock is offering a real bargain, or if there is still more room to run? You are not alone, and today's deep dive will give you the clarity you need.
• In the short term, Coursera's share price has dipped slightly, down 2.0% over the past week and 5.9% over the past month, while the year-to-date return sits at -6.2%. The one-year mark now shows a flat finish at 0.0%.
• Recent headlines have highlighted Coursera’s active push to expand its AI-driven learning solutions and new partnerships with top universities, creating additional growth buzz around the stock. This wave of innovation may be driving renewed interest and uncertainty among investors.
• When looking at valuation, Coursera scores a 3 out of 6 on our value check. See the breakdown here. We will break down what this score means using a few approaches, but stick around because the best way to judge fair value might surprise you.

Coursera delivered 0.0% returns over the last year. See how this stacks up to the rest of the Consumer Services industry.

Approach 1: Coursera Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow (DCF) model estimates a company's intrinsic value by projecting its future cash flows and discounting them back to today’s value. This approach relies on the idea that the worth of any business is essentially the sum of all cash it will generate in the future, adjusted for the time value of money.

For Coursera, the latest reported Free Cash Flow stands at $91.96 million. Analyst forecasts anticipate steady growth in annual cash generation, with projections indicating Free Cash Flow will reach $90.84 million by 2026 and $94.82 million by 2027. Further out, Simply Wall St extrapolates continued growth, estimating $117.48 million in Free Cash Flow by 2035. These figures reflect cautious optimism about Coursera's ability to expand its core operations and scale up its business.

Based on these projections, the DCF analysis calculates an intrinsic value of $13.90 per share. Compared to Coursera’s current market price, this suggests the stock is trading at a significant 42.8 percent discount, indicating that the market may be underappreciating the company’s long-term cash generation potential.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Coursera is undervalued by 42.8%. Track this in your watchlist or portfolio, or discover 920 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Coursera.

Approach 2: Coursera Price vs Sales

Price-to-Sales (P/S) is often a preferred metric for valuing companies like Coursera that are still growing and may not yet be consistently profitable. Unlike earnings-based multiples, P/S does not depend on positive net income. This makes it a more stable reference point for high-growth technology and education businesses.

Growth expectations and risk play a big part in what qualifies as a “normal” or “fair” P/S ratio. Companies with faster growth and lower risk typically command higher multiples, whereas slower-growing or riskier businesses often trade at a discount. For Coursera, the current P/S ratio is 1.79x. This puts it above the industry average of 1.38x and its peer average of 1.50x. This indicates the market is willing to pay a bit more than the typical firm in the Consumer Services sector.

To provide additional context, Simply Wall St calculates a "Fair Ratio" for Coursera of 1.15x. This proprietary metric goes beyond a simple industry or peer comparison by incorporating Coursera’s earnings growth, profit margin, risk factors, industry positioning, and market capitalization. It is a more comprehensive assessment than just lining up numbers from different companies because it actively considers what makes Coursera unique.

Since Coursera’s actual P/S of 1.79x is notably higher than its Fair Ratio of 1.15x, the stock appears overvalued based on this approach.

Result: OVERVALUED

PS ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1443 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Coursera Narrative

Earlier we mentioned that there is an even better way to understand valuation. Let us introduce you to Narratives. A Narrative is a story or perspective that ties together a company’s prospects, risk factors, and future potential, connecting them directly to a tailored financial forecast and an estimated fair value. Instead of relying solely on numbers or static analyst targets, Narratives let investors provide the “why” behind their assumptions about revenue growth, earnings, and future margins, turning subjective views into actionable insights.

On Simply Wall St’s Community page, Narratives are an easy and accessible tool trusted by millions of investors. They empower you to compare your own calculations and beliefs with those of others, using up-to-date scenarios that respond as soon as new information such as earnings results or major news emerges. By clearly linking a company’s story to a dynamic, forecast-driven fair value, Narratives help investors make smarter, more flexible decisions about when to buy or sell based on how the current price matches their expectations.

For example, investors in Coursera can create contrasting Narratives. One group believes surging global demand and AI-driven features will lift margins and justify a price target as high as $15.00, while others see tough competition and monetization challenges limiting upside to just $9.00 per share.

Do you think there's more to the story for Coursera? Head over to our Community to see what others are saying!

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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