Morgan Stanley Downgrades Coursera (COUR) to Equal Weight, Lifts PT to $11

On Thursday, Morgan Stanley downgraded Coursera Inc. (NYSE:COUR) to Equal Weight from Overweight, while slightly increasing its price target to $11 from $10.

The adjustment came as Morgan Stanley noted that Coursera currently trades at a premium valuation compared to Udemy Inc. (NASDAQ:UDMY). The firm's decision to adjust both stocks to Equal Weight is due to a lack of confidence that this valuation gap will significantly widen.

While Morgan Stanley still favors Coursera within the education software sector, it sees more attractive risk/reward opportunities elsewhere in its broader market coverage. Coursera reported a 6% year-over-year increase in Q1 2025 revenue, which reached $179 million. The company also generated over $25 million in free cash flow, which marked a 40% increase from the previous year.

Coursera welcomed more than 7 million new learners in the quarter and set a Q1 record, while its content catalog expanded by 37% over the past year, now offering ~10,000 courses. Additionally, the company launched 5 new entry-level professional certificates in collaboration with industry partners. However, Coursera is now investing in new initiatives without immediate top-line growth expectations, which may impact short-term financial performance.

Coursera Inc. (NYSE:COUR) provides online educational services in internationally. It operates through 3 segments: Consumer, Enterprise, and Degrees.

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Disclosure: None. This article is originally published at Insider Monkey.