Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Coursera (NYSE:COUR) and the best and worst performers in the consumer subscription industry.
Consumers today expect goods and services to be hyper-personalized and on demand. Whether it be what music they listen to, what movie they watch, or even finding a date, online consumer businesses are expected to delight their customers with simple user interfaces that magically fulfill demand. Subscription models have further increased usage and stickiness of many online consumer services.
The 8 consumer subscription stocks we track reported a mixed Q3. As a group, revenues beat analysts’ consensus estimates by 1.4% while next quarter’s revenue guidance was 2.2% below.
Luckily, consumer subscription stocks have performed well with share prices up 12% on average since the latest earnings results.
Coursera (NYSE:COUR)
Founded by two Stanford University computer science professors, Coursera (NYSE:COUR) is an online learning platform that offers courses, specializations, and degrees from top universities and organizations around the world.
Coursera reported revenues of $176.1 million, up 6.4% year on year. This print exceeded analysts’ expectations by 1.2%. Despite the top-line beat, it was still a mixed quarter for the company with a solid beat of analysts’ EBITDA estimates but revenue guidance for next quarter missing analysts’ expectations significantly.
“In the third quarter, we demonstrated strong progress across Coursera's learning ecosystem. We welcomed ten new partners and launched more than a dozen industry micro-credentials, many of which teach emerging skills in generative AI,” said Coursera CEO Jeff Maggioncalda.
Coursera delivered the weakest full-year guidance update of the whole group. The company reported 162 million users, up 19.1% year on year. Interestingly, the stock is up 10.1% since reporting and currently trades at $8.39.
Read our full report on Coursera here, it’s free.
Best Q3: Duolingo (NASDAQ:DUOL)
Founded by a Carnegie Mellon computer science professor and his Ph.D. student, Duolingo (NASDAQ:DUOL) is a mobile app helping people learn new languages.
Duolingo reported revenues of $192.6 million, up 39.9% year on year, outperforming analysts’ expectations by 1.8%. The business had a very strong quarter with an impressive beat of analysts’ EBITDA estimates and full-year EBITDA guidance exceeding analysts’ expectations.
Duolingo achieved the fastest revenue growth and highest full-year guidance raise among its peers. The company reported 113.1 million users, up 36.1% year on year. The market seems happy with the results as the stock is up 11.3% since reporting. It currently trades at $355.
Is now the time to buy Duolingo? Access our full analysis of the earnings results here, it’s free.
Weakest Q3: Chegg (NYSE:CHGG)
Started as a physical textbook rental service, Chegg (NYSE:CHGG) is now a digital platform addressing student pain points by providing study and academic assistance.
Chegg reported revenues of $136.6 million, down 13.5% year on year, exceeding analysts’ expectations by 1.9%. Still, it was a slower quarter as it posted a decline in its users and a significant miss of analysts’ number of services subscribers estimates.
Chegg delivered the slowest revenue growth in the group. The company reported 3.83 million users, down 12.9% year on year. Interestingly, the stock is up 38.8% since the results and currently trades at $2.47.
Read our full analysis of Chegg’s results here.
Bumble (NASDAQ:BMBL)
Founded by the co-founder of Tinder, Whitney Wolfe Herd, Bumble (NASDAQ:BMBL) is a leading dating app built with women at the center.
Bumble reported revenues of $273.6 million, flat year on year. This print topped analysts’ expectations by 0.7%. More broadly, it was a mixed quarter as it also logged an impressive beat of analysts’ EBITDA estimates but EBITDA guidance for next quarter missing analysts’ expectations.
The company reported 4.26 million active buyers, up 11.4% year on year. The stock is up 9.6% since reporting and currently trades at $8.60.
Read our full, actionable report on Bumble here, it’s free.
Match Group (NASDAQ:MTCH)
Originally started as a dial-up service before widespread internet adoption, Match (NASDAQ:MTCH) was an early innovator in online dating and today has a portfolio of apps including Tinder, Hinge, Archer, and OkCupid.
Match Group reported revenues of $895.5 million, up 1.6% year on year. This result lagged analysts' expectations by 0.6%. It was a slower quarter as it also produced revenue guidance for next quarter missing analysts’ expectations significantly and a decline in its users.
Match Group had the weakest performance against analyst estimates among its peers. The company reported 15.21 million users, down 3.2% year on year. The stock is down 11.7% since reporting and currently trades at $33.40.
Read our full, actionable report on Match Group here, it’s free.
Market Update
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), has fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty heading into 2025.
Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Quality Compounder Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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