Coursera IPO: Education Platform Stock Brings Opportunity in MOOCs
The Coursera IPO has been filed, cheering investors who’d hoped for a 2021 offering. It brings a unique opportunity, as few education technology companies go public. So investors want to know: Is Coursera stock a good investment opportunity? Here’s what we know…
Coursera IPO: What Is It?
Coursera is a “massive open online courses” (MOOC) platform. It offers courses for certifications and degrees. As of December 31, 2020, Coursera had more than 77 million registered learners. The platform was used by more than 2,000 organizations, 4,000 academic institutions and 300 government entities for employees, students and citizens. Additionally, Coursera offers more than 4,600 courses, 500 specializations, 40 certificates and 25 degrees.
The company aims to provide accessible education to all, regardless of class, race, gender or geographic location (check out what companies like Starlink are doing to make that possible). Some analysts think MOOCs are the future, particularly after the COVID-19 pandemic led to stay-at-home orders and closed schools for in-person learning. But some don’t think MOOCs can be profitable businesses.
The Coursera IPO is making headlines as one of the few education technology companies to go public. And investors anticipate Coursera stock soon. But is there a long-term opportunity here?
Investors wonder whether or not MOOCs can be profitable. Although many Coursera courses can still be audited for free, the platform offers paid services and products as well, including…
- Guided Project: $9.99
- Courses: Up to $99
- Specializations: $39 to $99 a month
- Professional Certifications: $39 to $99 a month
- MasterTrack Certificates: $2,000 to $6,000
- Degrees: $9,000 to $45,000.
Coursera is mostly for individuals, but it is also available to institutions. Businesses use it for employees, helping to upskill and reskill teams for innovation and growth. Governments on all levels use it to reskill workforces with in-demand skills and for new opportunities, such as emerging regional jobs. And lastly, campuses use Coursera to further online programs and help faculty stay up to date on the newest skills.
The platform claims the global economy is changing and that Coursera could be the answer. In the Coursera IPO filing, it cited the International Labour Organization, which claims that the global workforce will grow by 230 million people by 2030. And the organization estimates that half of the jobs that exist today will be automated by then. So where does Coursera fit in?
Coursera Stock: The Market
Although Coursera believes technology will disrupt jobs and markets, it also thinks it can be the solution. In the Coursera IPO filing, it says…
Technology, when applied to learning, can reduce distribution costs, increase affordability, extend access to less wealthy geographical regions, adapt a workforce more quickly to emerging skills, and expand the overall market opportunity for education companies.
According to the United Nations, 1.6 billion students in 190 countries saw their schools close temporarily due to COVID-19. Platforms like Coursera help schools be prepared for situations that might affect students’ ability to attend.
Another issue Coursera touched on is that the traditional class-based model may not be the best fit to teach the skills required in the modern work environment. The class-based model can neglect learners in remote areas, as well as non-traditional learners who need access to education and upskill training.
And finally, there’s the cost of education. Student loan debt is the second-largest household debt. It came in at $1.7 trillion at the end of 2020. Coursera says this can hurt people who are trying to further their personal lives and careers.
We believe the future of education will be characterized by blended classrooms, job-relevant education, and lifelong learning, and that online learning will be the primary means of meeting the urgent global demand for emerging skills. According to an estimate by the World Bank, there were more than 200 million college students around the world as of October 2017, many of whom did not have necessary job-relevant skills. The combined forces of online learning and remote work have the potential to increase global social equity by enabling a future where anyone, anywhere has access to both high-quality learning and high-quality job opportunities in an increasingly digital world.
The Financial Data
Although Coursera seems bullish on the education technology market, investors feel differently about the company’s finances from the last two years. And that could be the downfall of Coursera stock.
In 2019, Coursera recorded revenue of $184.4 million. It came with a cost of $89.6 million, resulting in a total gross profit of $94.8 million. However, due to other expenses, Coursera reported a net loss of $46.7 million for 2019.
Then, Coursera saw a spike in 2020 due to the coronavirus pandemic. Revenue grew at a rate of 59%, reaching $293.5 million. Revenue cost was $138.85 million, leaving a gross profit of $154.7 million. Those are growth rates of 60% and 63%, respectively, for revenue and gross profit. In 2020, Coursera again recorded a net loss. It was $66.6 million, up almost 38%.
Coursera states in its risk factors that it expects its revenue growth rate to decline as a result of the COVID-19 spike. The long-term societal effects of the pandemic are still unknown.
So, for those interested, what is the Coursera IPO date?
Coursera IPO Date, Price and More
Coursera filed with the SEC on March 5, 2021. To date, there is no confirmed Coursera IPO date, price or number of shares. Morgan Stanley is the primary underwriter, along with Goldman Sachs and Citigroup. Coursera stock filed to trade on the NYSE under the ticker symbol COUR.
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Coursera stock presents a unique opportunity, but until more information is revealed, it’s only speculation. Check back for updated information about the Coursera IPO.
About Amber Deter
Amber Deter has researched and written about initial public offerings (IPOs) over the last few years. After starting her college career studying accounting and business, Amber decided to focus on her love of writing. Now she’s able to bring that experience to Investment U readers by providing in-depth research on IPO and investing opportunities.