Could Coursera Stock’s Cash Flow Spark the Next Rally?
We think Coursera (COUR) stock is worth a look: It is growing, producing cash, and available at a significant valuation discount. Companies like this can use cash to fuel additional revenue growth, or simply pay their shareholders through dividends or buybacks. Either move makes them attractive to the market.
What Is Happening With COUR
COUR is down 1.0% so far this year and is now available at a significant discount to its 3-month, 1-year, and 2-year highs. This can be attributed to a subdued Enterprise segment with flat paid customer retention. Furthermore, recent shifts in international pricing strategies impacted sentiment.
The stock may not reflect it yet, but here is what’s going well for the company. Coursera generated $27 million Q3 2025 free cash flow, a 59% increase. Consumer revenue grew 13% from AI-focused courses and new learners. Full-year 2025 revenue guidance rose to 8-9%; debt-to-equity is 0.01.
COUR Has Strong Fundamentals
- Cash Yield: Coursera offers an impressive cash flow yield of 8.6%.
- Growing: Revenue growth of 8.1% over the last twelve months means that the cash pile is going to grow.
- Valuation Discount: COUR stock is currently trading at 32% below its 3-month high, 43% below its 1-year high, and 65% below its 2-year high.
Below is a quick comparison of COUR fundamentals with S&P medians.
| COUR | S&P Median | |
|---|---|---|
| Sector | Consumer Discretionary | – |
| Industry | Education Services | – |
| Free Cash Flow Yield | 8.6% | 3.9% |
| Revenue Growth LTM | 8.1% | 6.4% |
| Operating Margin LTM | -9.4% | 18.8% |
| PS Ratio | 1.6 | 3.3 |
| PE Ratio | -26.2 | 24.2 |
| Discount vs 3-Month High | -32.1% | -3.6% |
| Discount vs 1-Year High | -42.6% | -8.6% |
| Discount vs 2-Year High | -64.7% | -11.3% |
*LTM: Last Twelve Months
But What About The Risk Involved?
While COUR stock may be a compelling investment opportunity, it’s always helpful to be aware of a stock’s history of drawdown. COUR took a hit of about 83% during the Inflation Shock. That’s a pretty steep drop, even with all the positives around. It shows that no matter how solid a stock looks, severe market turmoil can still cause big losses. It’s a reminder that risk doesn’t disappear just because things seem favorable. But the risk is not limited to major market crashes. Stocks fall even when markets are good – think events like earnings, business updates, and outlook changes. Read COUR Dip Buyer Analyses to see how the stock has recovered from sharp dips in the past.
If you want to see more details, read Buy or Sell COUR Stock.
Other Stocks Like COUR
Not ready to act on COUR? You could consider these alternatives:
We chose these stocks using the following criteria:
- Greater than $2 Bil in market cap
- Positive revenue growth
- High free cash flow yield
- Meaningful discount to 3M, 1Y, and 2Y highs
A portfolio that was built starting 12/31/2016 with stocks that fulfil the criteria above would have performed as follows:
- Average 6-month and 12-month forward returns of 25.7% and 57.9% respectively
- Win rate (percentage of picks returning positive) of >70% for both 6-month and 12-month periods
Smart Investing Begins With Portfolios
Individual stocks are unpredictable. A smart portfolio keeps you invested, limits downside shocks, and provides upside exposure
The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.