$0.00
$3.03
bear $0.00
base $0.00
bull $3.03
margin of safety $0.75
market price* $4.94
Business condition attached to the margin of safety
Owner earnings after stock compensation positive for a full year (they were about negative $47 million in 2025), with stock compensation held flat or falling in dollars, and the Udemy merger, if completed, not having materially increased the share count without adding matching earnings.
Coursera runs an online learning marketplace. Consumer learners (about $502 million of 2025 revenue) buy courses, certificates and degrees from university and industry partners, and the Enterprise segment (about $255 million) sells access to employers, governments and schools. Revenue was $757.5 million in 2025, up 9.0% after 9.3% in 2024. About 51% of revenue is billed to United States customers, with the rest from Europe, the Middle East and Africa, Asia Pacific and other regions. How we measured earnings. We start from cash generated by operations, remove the one-off swings from working capital (deferred revenue growth alone has added about $21 million a year), subtract stock compensation as a real cost, and subtract the capital spending needed to stand still (software capitalised for internal use, purchases of content, and equipment). On that basis Coursera's owner earnings per share were negative every year we measured: about -$1.24 (2021), -$1.11 (2022), -$0.80 (2023), -$0.54 (2024) and -$0.28 (2025). The trend is clearly improving, but it has not yet crossed zero. The business generated $108.7 million of operating cash flow in 2025, yet stock compensation of $95.1 million and about $28 million of maintenance-type spending consume nearly all of it, and about $32 million of net interest income on the cash balance is part of that total. Diluted shares also rose from 145.3 million (2022) to 163.8 million (2025), about 13%, which is the cost of that stock compensation to existing holders. Growth and improvement we credited. Stock compensation has fallen from 22.0% of revenue in 2021 to 12.6% in 2025, and in dollars from $110.8 million (2022) to $95.1 million (2025). Operating cash flow before working capital and stock compensation has also improved each year since 2022, from a loss of about $40 million to a profit of about $76 million in 2025. We treat these as a demonstrated but short record, not a guarantee, because the company has only about five years of public reporting. Revenue growth of 9% is likewise a two-year record. Bear case: $0 per share. Revenue growth fades, stock compensation stays near $95 million a year, and cash margins stop improving. Owner earnings then stay negative for the whole forecast, so nothing we can point to produces value for shareholders. The balance sheet shows no borrowings, only operating liabilities such as customer prepayments (deferred revenue), so the value cannot fall below zero. Base case: $0 per share. We assume revenue growth of 6% fading to 3%, stock compensation falling one percentage point of revenue a year to 8% of revenue, and operating cash margin (before interest income) rising from 2.2% to 5.0% of revenue. Even with that, owner earnings remain around break-even at best (roughly -$38 million in year one, about zero by year five) and the ten-year value is slightly below zero, so we floor it at zero. We do not credit further improvement because it depends on management delivering cost cuts that have not yet happened. Bull case: about $3.03 per share. Here the company's own recent trends continue: revenue growth of 9% fading to 3% by year eight, stock compensation falling about two percentage points of revenue a year to 6%, and operating cash margin rising to 8% of revenue by year four. Owner earnings turn positive in year two and reach about $57 million by year ten, and we hold that level for a further ten years before assuming nothing more. That is worth about $496 million today, or $3.03 per diluted share of 163.8 million. The cash pile is not added on top. Coursera held $792.6 million in cash and equivalents at the end of 2025 (about $4.70 per share on 167.9 million shares outstanding), but the interest it earns is already inside our earnings figure, so adding the balance again would count it twice. A reader who values the cash on its own should weigh it against the stock compensation cost that is not being offset by buybacks: no shares were repurchased in 2025, and $27.6 million was spent on tax withholding when employee share awards vested. Pending Udemy merger. In December 2025 Coursera agreed to acquire Udemy, with each Udemy share converting into 0.800 Coursera shares; the deal was expected to close in the second half of 2026 and carries a $40.5 million termination fee payable by Coursera in certain circumstances. Our figures are for Coursera as it stood at the end of 2025 and do not include Udemy. If the deal closes, the share count rises and the value per share depends on how much Udemy earns after stock compensation, which we cannot yet judge. Margin-of-safety price. The margin-of-safety price is about $0.75 per share, and it applies only once owner earnings turn positive. The wide gap between the bull value and the zero base reflects how much of the value depends on cost discipline that has yet to be proven. What would make us wrong: if stock compensation keeps falling as fast as it has since 2021 while revenue keeps growing about 9%, the business is worth materially more than we show. Note on sources: all figures come from the company's annual reports for 2021 through 2025. Free cash flow reported by the company ($78.5 million in 2025) is not on our basis because it does not deduct stock compensation.