Online education companies may have had a boost from the effects of COVID-19 on stay-at-home learning over the last 18 months, but sometimes investors miss the real lesson.
Collins added "As we've seen from recent IPOs, the reaction can be hit or miss. Coursera grabbed hold of the online education burst because of Covid and rode the fires of momentum the first day. The stock opened around $40 but traded to $60 in its first week. This came after the company priced its shares at $33. From a nearly double back to even by mid-May. It's fair to say this one has been a roller coaster, but what I see are a series of lower highs and a bearish setup yet again."
Coursera came out of the gate strong, but Collins doesn’t see that kind of growth in the stock’s future. In fact exactly the opposite. Collins sees Coursera as weak and getting weaker.
"Multiple secondary indicators have flipped bearish from the Full Stochastics indicator to the MACD to the parabolic stop-and-reverse (PSAR) indicator. The 21-day simple moving average (SMA) has crossed beneath the 50-day SMA."
If the economy turns to overwhelmingly favor of online education again, Collins thinks that Coursera might bounce back. The stock has fallen far from its post-IPO high though, and Collins can see it going back to the low-30s if circumstances don’t come to the company’s rescue.