Coursera (COUR 13.07%) stock saw big sell-offs in Friday's trading despite a bullish backdrop for the broader market. The education-services company's share price fell 12.9% in a daily session that saw the S&P 500 (SNPINDEX: ^GSPC) rise 0.8% and the Nasdaq Composite (NASDAQINDEX: ^IXIC) jump 1.1%.
Coursera published its third-quarter results after the market closed yesterday, and actually posted better-than-expected sales and earnings for the period. The company also raised its full-year sales guidance, but that wasn't enough to stop a significant valuation contraction for the company.
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Coursera sinks despite quarterly beats
After the market closed yesterday, Coursera published results for this year's third quarter. The company notched non-GAAP (generally accepted accounting principles) adjusted earnings per share of $0.10 on sales of $194.2 million -- beating the average Wall Street analyst estimate for per-share earnings of $0.08 on sales of approximately $190.3 million. Coursera's revenue increased roughly 10% year over year last quarter and caused the company to increase its full-year sales target, but investors sold the stock in response to disappointing guidance on one of the company's profitability metrics.
NYSE: COUR
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What's next for Coursera?
For the fourth quarter, Coursera is targeting revenue between $189 million and $193 million. The target came in well ahead of Wall Street's target for sales of $187.5 million in the quarter. Management also updated the company's full-year sales guidance to between $750 million and $754 million. For comparison, Wall Street had been targeting sales of approximately $744.4 million prior to yesterday's quarterly report.
On the other hand, the company's guidance for adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) between $7 million and $10 million in Q4 fell significantly short of Wall Street's target of roughly $10.2 million. So while Coursera's sales outlook has improved, investors are concerned that revenue growth is coming with weaker margins.
