Coursera stock price continued its strong uptrend in the extended hours after the company published strong financial results. COUR jumped by over 23% to $11.25, its highest point since July last year. It has jumped by over 94% from its lowest level this year.

Why Coursera stock price is surging

Coursera is one of the biggest companies in the education industry. It operates a platform where users can subscribe to learning materials on most fields, such as data science, sales and marketing, healthcare, and software engineering. 

Coursera operates a business-to-consumer (B2C), a business-to-business (B2B), and a business-to-government (B2G) solution. In this, individuals can use its courses to learn new skills or expand their knowledge on existing areas. 

Read more: Coursera stock price analysis: will this edtech giant rebound?

Coursera stock price surged after the company published strong financial results that demonstrated its business was still growing. Its numbers showed that the total revenue jumped by 10% in Q2 to $187 million. 

This revenue growth was driven by the consumer segment whose revenue jumped by 10% to $122 million. Its enterprise revenue, which includes services to businesses and governments, jumped by 10% to $65 million.

This growth occurred as the number of registered learners increased by 18% to 183 million, while the number of corporate clients rose to 1,686. 

Most importantly, the company continued to narrow its losses as the path towards profitability became clearer. It adjusted EBITA jumped by 73% to $18 million, while the net loss improved to $7.8 million. Coursera’s free cash flow improved to $28.6 million. In a statement, the CFO said:

“We are raising our outlook for the full year as we begin to implement new operational capabilities and invest in a focused set of initiatives to reignite durable, long-term growth.”

The management expects its business growth to continue in the coming quarters. Specifically, analysts anticipate that its third-quarter revenue will be between $188 million and $192 million, and its adjusted EBITDA to be between $10 million and $14 million.

The company expects full-year revenue to be between $738 million and $746 million. This guidance is higher than the average estimate from Wall Street analysts, who expect it to grow to $737 million.

The main concern for Cousera is that it is highly overvalued. Its forward revenue guidance represents a growth of about 10%, while its EBITDA margin is 8%, representing a rule of 40 metric of 18%.

Coursera share price analysis

COUR stock chart | Source: TradingView

The daily chart shows that the Coursera share price has rebounded in the past few weeks. It has formed the highly bullish inverse head-and-shoulders chart pattern, whose neckline was at $9.5.

This pattern partially explains why the COUR stock price has jumped after its earnings. Therefore, the most likely scenario is where it continues its strong surge and reaches a high of $11.73, the 38.2% retracement level. 

More gains will see it jump to the 50% retracement point at $13.60, which coincides with the inverse H&S target price.

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