Further weakness as Coursera (NYSE:COUR) drops 13% this week, taking one-year losses to 66%

The nature of investing is that you win some, and you lose some. And unfortunately for Coursera, Inc. (NYSE:COUR) shareholders, the stock is a lot lower today than it was a year ago. The share price has slid 66% in that time. We wouldn't rush to judgement on Coursera because we don't have a long term history to look at. Shareholders have had an even rougher run lately, with the share price down 14% in the last 90 days. But this could be related to the weak market, which is down 12% in the same period.

After losing 13% this past week, it's worth investigating the company's fundamentals to see what we can infer from past performance.

See our latest analysis for Coursera

Coursera isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Shareholders of unprofitable companies usually expect strong revenue growth. That's because fast revenue growth can be easily extrapolated to forecast profits, often of considerable size.

Coursera grew its revenue by 36% over the last year. We think that is pretty nice growth. Meanwhile, the share price tanked 66%, suggesting the market had much higher expectations. It is of course possible that the business will still deliver strong growth, it will just take longer than expected to do it. For us it's important to consider when you think a company will become profitable, if you're basing your valuation on revenue.

The company's revenue and earnings (over time) are depicted in the image below (click to see the exact numbers).

Coursera is well known by investors, and plenty of clever analysts have tried to predict the future profit levels. If you are thinking of buying or selling Coursera stock, you should check out this free report showing analyst consensus estimates for future profits.

A Different Perspective

We doubt Coursera shareholders are happy with the loss of 66% over twelve months. That falls short of the market, which lost 20%. There's no doubt that's a disappointment, but the stock may well have fared better in a stronger market. The share price decline has continued throughout the most recent three months, down 14%, suggesting an absence of enthusiasm from investors. Basically, most investors should be wary of buying into a poor-performing stock, unless the business itself has clearly improved. I find it very interesting to look at share price over the long term as a proxy for business performance. But to truly gain insight, we need to consider other information, too. For instance, we've identified 3 warning signs for Coursera that you should be aware of.

We will like Coursera better if we see some big insider buys. While we wait, check out this free list of growing companies with considerable, recent, insider buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.