With Coursera's (NYSE:COUR) stock price now up more than 50% from its March 31 initial public offering, it's clear that investors are eager to get a piece of the digital learning platform. As the COVID-19 pandemic pushed people toward online education alternatives, Coursera saw rapid expansion throughout 2020, led by a 65% increase in total registered learners.

As the world continues to reopen, potential investors should be asking what role Coursera will play in the education space. 

What does Coursera do?

Before we look to the future, it's important to understand how Coursera fits into the education landscape. Its platform is designed to help individuals better themselves through education. Unlike traditional education systems, however, it provides individuals with a flexible, cost-effective solution that's truly relevant to their goals. 

College savings money in a jar

Image source: Getty Images.

Coursera connects individuals with top-level educators that offer a variety of lessons, ranging from shorter guided projects to comprehensive online degrees. So whether someone is looking for a cheaper alternative to college or trying to develop a skill for a specific occupation, Coursera can help the student get there. 

With tuition rising to astronomical levels across most U.S. universities, individuals are searching for alternatives. Here's the traction Coursera has seen in its degrees segment in just 2020 alone:

  Q1 Q2 Q3 Q4
No. of Degree Students on Coursera in 2020
7,184 8,079 11,504 11,900

Source: Coursera S-1 filing March 5, 2021.

It's great for enterprises

But skill development doesn't happen just at the college level -- learning is a perpetual process. For a large business, teaching different skills to existing employees is far cheaper than hiring new ones. Not only does hiring a new employee require paying an additional salary, but it also costs a business time and money to recruit and bring another member into the organization. This is why 387 enterprise customers, including 25% of Fortune 500 companies, are now turning to Coursera for help.

Since 2017, Coursera's revenue from enterprises is up more than 800% and now accounts for roughly a quarter of all sales. But it's not just businesses that make up its enterprise category. Colleges and universities also benefit from Coursera since it enables them to provide more job-specific courses for their students without nearly as much staffing costs.

With Coursera's catalog of more than 500 job-relevant specializations and 4,600 two-month courses, users are able to learn or enhance a particular skill set at a fraction of the cost of going to a college or university. 

Will Coursera disrupt higher education?

Though Coursera offers a great alternative to the traditional college route, it's hard to picture a world where universities no longer play a role in the education system. For many university-level students, the camaraderie and connections gained from being in a college setting are crucial components of the learning process as well.

With that said, greater accessibility to a high-level education seems like something the world craves. And the demand for Coursera's cheaper and more-flexible model is clear. Within less than 10 years, the company has amassed 77 million total registered learners across its platform, and the pandemic has only accelerated that growth. 

Yet despite my enthusiasm for Coursera's business model, the valuation is a little tough to justify. The company's stock currently trades at a market cap of roughly $6.5 billion, or 22 times its trailing-12-month sales. Between this premium valuation and uncertainty around the reopening of the economy, Coursera will remain on my watch list for the time being. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.