Coursera, Inc. (NYSE:COUR) shareholders should be happy to see the share price up 12% in the last month. But that doesn't change the reality of under-performance over the last twelve months. The cold reality is that the stock has dropped 50% in one year, under-performing the market.
The recent uptick of 10% could be a positive sign of things to come, so let's take a lot at historical fundamentals.
See our latest analysis for Coursera
Because Coursera made a loss in the last twelve months, we think the market is probably more focussed on revenue and revenue growth, at least for now. When a company doesn't make profits, we'd generally expect to see good revenue growth. As you can imagine, fast revenue growth, when maintained, often leads to fast profit growth.
In the last year Coursera saw its revenue grow by 41%. We think that is pretty nice growth. Meanwhile, the share price is down 50% over twelve months, which is disappointing given the progress made. This implies the market was expecting better growth. But if revenue keeps growing, then at a certain point the share price would likely follow.
The image below shows how earnings and revenue have tracked over time (if you click on the image you can see greater detail).
Coursera is a well known stock, with plenty of analyst coverage, suggesting some visibility into future growth. You can see what analysts are predicting for Coursera in this interactive graph of future profit estimates.
Given that the market gained 8.8% in the last year, Coursera shareholders might be miffed that they lost 50%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. The share price decline has continued throughout the most recent three months, down 7.3%, suggesting an absence of enthusiasm from investors. Given the relatively short history of this stock, we'd remain pretty wary until we see some strong business performance. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. Case in point: We've spotted 3 warning signs for Coursera you should be aware of, and 1 of them can't be ignored.
Of course Coursera may not be the best stock to buy. So you may wish to see this free collection of growth stocks.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
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