Duolingo And Coursera Shares Dip As Analyst Warns Of Generative AI Disruption In EdTech
Portfolio Pulse from Lekha Gupta
Goldman Sachs analyst Eric Sheridan downgraded shares of Duolingo Inc (DUOL) and Coursera Inc (COUR), citing risks from generative AI disruption in the EdTech sector. Sheridan sees traditional EdTech offerings being challenged by free, centralized content access. Duolingo's rating was lowered from Neutral to Sell with a price target of $160, and Coursera was downgraded from Neutral to Sell with a price target reduced from $18 to $14. Adjusted EBITDA margin and revenue estimates for both companies were also reduced. Shares of DUOL and COUR fell by 4.491% and 11.3%, respectively.
January 19, 2024 | 5:54 pm
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NEGATIVE IMPACT
Coursera downgraded from Neutral to Sell by Goldman Sachs, with a price target reduced from $18 to $14. Lowered revenue and operating margin estimates due to weaker enterprise revenues and strategic investments.
The downgrade and reduced price target reflect concerns over Coursera's enterprise revenue and strategic investments, which could lead to a decrease in the stock price in the short term.
CONFIDENCE 80
IMPORTANCE 85
RELEVANCE 90
NEGATIVE IMPACT
Duolingo downgraded from Neutral to Sell by Goldman Sachs, with a price target of $160. Concerns over generative AI disruption and increased competition leading to higher marketing costs.
The downgrade by a major analyst due to the potential disruption from generative AI technologies and increased competition is likely to negatively impact investor sentiment and the stock price in the short term.
CONFIDENCE 80
IMPORTANCE 85
RELEVANCE 90