Coursera, Chegg Dip on Weak Forecasts, CEO Shift

Key Takeaway

• Coursera and Chegg stocks fall after issuing weaker-than-expected guidance, with Coursera's Q2 revenue forecast between $162M-$166M and full-year outlook of $695M-$705M.
• Chegg announces CEO transition amid an 8% drop in subscribers and a Q2 revenue forecast of $159M-$161M, below expectations.
• Despite edtech challenges, Blend Labs gains from a $150M investment by Haveli Investments, contrasting with NXP Semiconductors' 3.6% stock increase post-strong earnings.

Education Stocks Face Challenges

In the latest financial updates, education technology companies Coursera Inc. and Chegg Inc. have both reported weaker-than-expected guidance for the current quarters, leading to a notable decline in their stock prices in after-hours trading. Coursera, known for its massive open online courses, reported a 15% increase in revenue to $169.1 million, which, despite showing growth, fell slightly short of the expected $170.4 million. The company also projected second-quarter revenue to be between $162 million and $166 million, below the anticipated $178 million. For the full year of 2024, Coursera expects revenue to range from $695 million to $705 million, against analysts' expectations of $737 million. Chegg, on the other hand, experienced an 8% drop in subscribers and provided a second-quarter revenue forecast ranging from $159 million to $161 million, which is below the expected $174 million. This news comes alongside the announcement of a CEO transition, with Nathan Schultz set to take the helm from Dan Rosensweig on June 1.

Leadership Transition at Chegg

Chegg's announcement of a CEO change marks a significant leadership transition for the company. Nathan Schultz, a 16-year veteran at Chegg and the company's COO, will succeed Dan Rosensweig, who has led the company for 14 years. Rosensweig will move into the role of executive chairman. This change comes at a time when Chegg is navigating through a challenging period, marked by a decrease in subscribers and a downward adjustment in revenue forecasts.

Tech and Investment Highlights

Despite the downturn in the education sector, the technology and investment landscapes have shown some bright spots. Blend Labs saw a significant surge in its stock price, up 20%, following a $150 million investment from Haveli Investments. This investment, structured as convertible preferred stock with a zero percent coupon, signals a strong vote of confidence in Blend Labs. Meanwhile, NXP Semiconductors reported strong earnings and an optimistic forecast for the next quarter, leading to a 3.6% increase in its stock price. This positive performance in the tech sector contrasts with the challenges faced by education technology companies.

Management Quotes

• CEO of Coursera:

  "Coursera lost $21.3 million, or 14 cents a share, in the first quarter, compared with a loss of $32.4 million, or 22 cents a share, a year ago." "Adjusted for one-time items, the company earned 7 cents a share, above FactSet consensus of a penny a share." "The massive open online-course provider’s revenue rose 15% to $169.1 million, up from $147.6 million a year ago."

• Nathan Schultz (appointed next chief executive of Chegg):

  No direct quote provided.

• Dan Rosensweig (stepping down as CEO after 14 years at Chegg):

  No direct quote provided.

(Note: While specific quotes are attributed to corporate management roles and changes within Chegg Inc., there are no directly quoted statements from Nathan Schultz or Dan Rosensweig regarding their thoughts or strategies on the matter.)