On Tuesday, UBS adjusted its outlook on Coursera Inc (NYSE: NYSE:COUR), reducing the price target to $12 from the previous $21, while keeping a Neutral rating on the stock. The adjustment comes as SoFi Technologies (NASDAQ:SOFI) Inc reports its financial results, which included adjusted net revenue of approximately $581 million, surpassing the Street's expectations by about 4%.
This revenue increase was attributed to strong performances in the Lending and Other revenue sectors, although the Financial Services and Technology Platform areas did not meet projections.
SoFi's adjusted EBITDA reached $144 million, exceeding the Street's estimate of $122 million. The company's Technology Platform revenue experienced a 21% year-over-year growth, marking an acceleration compared to 13% in the previous quarter. This growth was fueled by the onboarding of new clients, significant banking deals in Latin America, and successful monetization of existing clients introducing new products.
Looking ahead to the full year of 2024, SoFi has increased its adjusted revenue guidance by approximately 1% or $25 million at the midpoint, now forecasting between $2,390 million and $2,430 million.
This update follows a $26 million beat in the first quarter compared to initial guidance. SoFi anticipates a combined growth of around 50% from its Tech Platform and Financial Services, with Financial Services now expected to grow more than 75%, up from the previously estimated 75%.
The company has also raised its guidance across other financial metrics for FY 2024. The EBITDA projection now stands at $590 million to $600 million, which is about 2% above the Street's midpoint expectations, with an anticipated margin of approximately 25%. The GAAP net income is expected to be between $165 million and $175 million, including a roughly $59 million gain from the extinguishment of debt in the first quarter. The GAAP EPS forecast of $0.08 to $0.09 aligns with consensus estimates at the lower end.
In the context of the US Neobank market, which is anticipated to undergo consolidation and a re-bundling of services, UBS believes that SoFi is relatively well-positioned. The firm also views the expectation of sustained GAAP profitability as a positive, although it maintains that the risk-reward profile appears balanced.
InvestingPro Insights
In light of UBS's recent adjustment of Coursera Inc's (NYSE: COUR) price target, it's worth noting some key metrics and insights from InvestingPro. The company holds an adjusted market capitalization of $1.87 billion, and although its P/E ratio stands at a negative -15.13, indicating lack of profitability in the last twelve months as of Q1 2024, analysts are expecting a change in tides. Notably, Coursera's net income is projected to grow this year, and seven analysts have revised their earnings estimates upwards for the upcoming period, suggesting increased confidence in the company's financial prospects.
While the stock has experienced a decline over the last month, with a 1-month price total return of -15.19%, it's also worth mentioning that Coursera's liquid assets surpass its short-term obligations, providing some financial stability. Additionally, the company's revenue has grown by 19.28% over the last twelve months as of Q1 2024, which may be an indicator of underlying business strength despite recent stock performance challenges.
For investors looking for more in-depth analysis and additional insights, there are 10 more InvestingPro Tips available on Coursera, which can be accessed at https://www.investing.com/pro/COUR. Interested readers can also take advantage of a special offer using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription.
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