Coursera’s IPO: Putting the company’s market cap in perspective

Author

Phil Hill
March 31, 2021

Coursera, the online education that started as a MOOC provider but today also offers OPM services and Courseware, debuted on the public markets. It was a big day, as Coursera priced its initial offering at the high-end of the expected range but then saw shares rise 36% in its first day. As reported by CNBC:

Shares of education tech company Coursera closed up 36% after its market debut Wednesday on the New York Stock Exchange. Shares closed at $45, giving the company a market cap of $5.9 billion.

On Tuesday, Coursera priced its 15.73 million shares at $33 apiece — the high end of its initial $30 to $33 target range. In its offering, the company raised nearly $520 million at an implied $4.3 billion valuation.

Analysis TBD

Once I get beyond some big client deadlines, I’ll get to writing more of my analysis of Coursera – where they are today, how to understand the different offerings, what makes them unique. But in the meantime, I recommend Dhawal Shah’s writeup at Class Central of Coursera’s S-1 prospectus document to see what we have learned so far about the company’s operations.

I have also completed close to a dozen courses on the platform.

So to me, this S-1 feels like the series finale of a TV show I’ve been following for ages: all the plots and subplots have been resolved. I finally get to discover whether my theories and speculations over the years were correct.

Class Central analysis of Coursera's revenue by segment from 2017 - 2020

Market Cap

The immediate story today is how strong Coursera performed, resulting in a market capitalization of roughly $5.9 billion. How does this compare to other education companies? It turns out, quite well. Focusing just on publicly-traded companies in the US or UK that deal with higher education, Coursera jumped to second place in its first day, more or less tied with Pearson. In other words, the public market values the company more highly than 2U, Grand Canyon Education, and Pluralsight. Only Chegg has a larger market cap as of the end of March 2021.

For the chart below I have rounded to the nearest million dollars for market cap and revenue, and to the nearest $100,000 for net income. The point here is not a full financial analysis, but rather a comparison of market cap, revenue, annual revenue (trailing 12 months) and net income to put this IPO in perspective.

Coursera compared to other US / UK publicly-traded education companies.