Online education services provider Nerdy (NRDY 3.85%) was providing a handy tutorial on how to boost a stock's price this week. A big buy from an important executive propelled the company's shares higher; they were up almost 34% week to date as of early Friday morning according to data provided by S&P Global Market Intelligence.
As Nerdy revealed in a regulatory filing, its founder and CEO Chuck Cohn splurged to buy a big stake in the company. On Aug. 20, he purchased a cool 5 million shares for $17.5 million, which is quite the buy in both absolute and relative terms -- after all, the total number of shares outstanding is currently just under 91.5 million.
In other words, Cohn bought more than 5% of all shares available. That's an audacious move, even for a CEO/founder, and regardless of circumstance helps instill great confidence in a business.
As it happens, the circumstances are rather favorable for Nerdy just now. Less than two weeks ago, the next-generation education company reported its second-quarter earnings results. These trounced analyst estimates, with revenue slightly north of $42 million well above the average prognosticator projection of $38.5 million, and per-share earnings of $0.09 far better than the collective estimate of a $0.17 loss.
Given that kind of outperformance, it was little surprise when a clutch of analysts raised their price targets on Nerdy stock. One was Needham & Company analyst Ryan MacDonald, with a 25% bump from $4 per share to $5. MacDonald is particularly enthused about the company's new subscription service, Learning Membership, which he believes should "create a revenue headwind" through the second half of this year.