3 Stocks That Could Benefit from the Continuous Rise of Online Education
The global pandemic caused a significant shift in education, moving online platforms to the forefront while traditional classrooms took a back seat. This change led to a significant increase in demand for e-learning, creating valuable opportunities in online education stocks.
Moreover, Statista predicts an increase from $185.20 billion in 2024 to $257.70 billion by 2028 in the online education market. This upswing is driven by growing internet penetration and the acceptance of digital learning. Similarly, as EdTech embraces artificial intelligence (AI), it is set to add significantly to its total addressable market. According to Market Research Future, the fusion of AI within education is projected to skyrocket from $3.45 billion in 2023 to $23.82 billion by 2030.
Amidst this vibrant growth, three online education stocks stand out for investment, uniquely positioned to benefit from the ongoing e-learning expansion.
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Online Education Stocks: Coursera (COUR)
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Coursera (NYSE:COUR) has revolutionized global access to education, leveraging generative AI to diversify its offerings and secure key partnerships. The inauguration of the Gen AI Academy in the UAE, aligns with a projected $5.3 billion investment in generative AI by 2030. Moreover, the ‘Generative AI for Everyone’ course attracting over 100,000 enrollees, underscore the firm’s commitment to cash-in on AI in EdTech trend.
Financially, Coursera posted another strong showing in its fourth quarter (Q4) of 2023, reporting non-GAAP earnings-per-share (EPS) of six cents, surpassing estimates by 100%. Additionally, its revenue of $168.88 million exceeded expectations by $4.11 million, pointing to an 18.8% increase compared to prior-year period. This performance marked Coursera’s sixth consecutive quarter of blowing past analyst expectations, indicative of the platform’s dominance.
These strategic achievements signal a promising horizon for Coursera, signaling a bright future for this online education stock.
Udemy (UDMY)
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Udemy (NASDAQ:UDMY) is transforming online education with courses effectively aligning with today’s skills-based economy.
Financially, Udemy showcased remarkable resilience, marking a 16% increase in revenue to $729 million in 2023. For Q4 2023, Udemy’s revenue surged by 15% to $190 million, surpassing expectations by an enticing $3.45 million. Additionally, Udemy Business achieved a stellar 27% growth at $115 million, setting optimistic 2024 projections between $795 and $810 million with an adjusted EBITDA margin of 1.5% to 2.0%, underscoring its impressive and promising market trajectory.
Udemy recently laid down its generative AI roadmap to accelerate personalized skills development. It includes robust AI-assisted learning and content creation tools, focusing on creating personalized learning solutions and integrating new skills into workflows. Moreover, these tools are could transform how professionals develop new skills in a skills-based economy, ensuring high-quality learning experiences for both learners and organizations.
Zoom Video (ZM)
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Zoom Video (NASDAQ:ZM) has bounced back emphatically post-pandemic by strategically embracing AI, ensuring its continued relevance and competitiveness.
Building on its momentum, Zoom transcended expectations in Q4 2023, boasting an EPS of $1.22 over the estimated $1.15, alongside revenues soaring to $1.15 billion against the forecasted $1.13 billion—a notable 3% annual increase. Meanwhile, the surge in enterprise customers to 220,400, representing a 3.5% YOY growth, positions Zoom as a potential catalyst for innovation in the online education sector for the year.
The company has introduced the Zoom AI Companion, a generative AI digital assistant aiming to enhance productivity, collaboration, and skills across Zoom’s platform. Some of the features include meeting summaries, smart message drafting, and AI-generated content among others. This visionary approach in digital communication has not gone unnoticed, with Quant analysts assigning ZM stock a ‘strong buy’ rating, indicating a bright and lucrative outlook for the company.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines
Muslim Farooque is a keen investor and an optimist at heart. A life-long gamer and tech enthusiast, he has a particular affinity for analyzing technology stocks. Muslim holds a bachelor’s of science degree in applied accounting from Oxford Brookes University.
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