By Angela Palumbo
Coursera stock was sinking Friday after the online learning platform lowered its forecast of revenue for the year and said it is cutting staff in response to consumer spending.
Coursera said after the stock market closed on Thursday that it expects revenue for the year to be between $690 million and $694 million. That is a cut from a previous call for revenue of $695 million to $705 million and below Wall Street estimates of $700 million.
"We are seeing some softer signal in global consumer trends," Chief Financial officer Kenneth Hahn said on a call to discuss the results. "Specifically month-to-month retention that are tempering our fourth quarter revenue expectations and factored into the outlook,"
The company also said it plans to reduce its workforce by 10% in an effort to bring down costs and focus on investing in initiatives that are expected to bring long-term growth.
Shares of Coursera fell 20% to $6.06 in premarket trading on Friday. Coming into the session, the stock has tumbled 61% this year.
Stock in Chegg, another online learning platform, was flat in the premarket session. That stock has fallen 86% in 2024. Chegg is scheduled to report its third-quarter earnings on Nov. 12.
A big concern for these companies has been competition, specifically with free generative artificial intelligence platforms like ChatGPT.
Still, Coursera reported third-quarter adjusted earnings of 10 cents a share from revenue of $176.1 million, while Wall Street had expected earnings of 2 cents a share and revenue of $174 million. In the same period last year, the company posted a loss of 1 cent a share from revenue of $165.5 million.
Given the stronger-than expected quarterly results and the beating the stock has taken this year, William Blair analyst Stephen Sheldon maintained an Outperform rating on Coursera, without a target for the stock price. He wrote in a research note on Friday that "any signs of accelerating growth and/or the decision to leverage its large cash balance for share repurchases could serve as catalysts for the stock."
Write to Angela Palumbo at angela.palumbo@dowjones.com
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(END) Dow Jones Newswires
October 25, 2024 09:29 ET (13:29 GMT)
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