Canaccord Genuity analyst Maria Ripps maintained a Buy rating on Nerdy (NRDY – Research Report) yesterday and set a price target of $5.00.
Maria Ripps issued a Buy rating for Nerdy’s stock based on several crucial factors. The primary reason is Nerdy’s robust Q3 performance, which surpassed expectations in terms of active members, revenue, and profitability. This was facilitated by better than anticipated customer acquisition and engagement trends during the quarter, as evidenced by a 40% increase in new consumer learning members. Additionally, Nerdy’s institutional business executed 80 contracts in Q3, which resulted in a 133% revenue growth, thanks to the addition of subscription and access-based solutions to the product portfolio.
However, Maria also recognizes some challenges for Nerdy, such as the Q4 outlook for revenue and EBITDA being noticeably below expectations and previous guidance, primarily due to lower retention and reactivation trends from customers who had converted to the Membership model earlier in the year. Despite this, she remains optimistic as Nerdy is witnessing record new customer acquisition growth at high engagement levels. Furthermore, Maria notes the company’s successful transition to a subscription-based business model with improving unit economics in a relatively short period. Lastly, she believes that the revamp of the institutional product platform could accelerate school district uptake, positioning Nerdy for new contract wins and deepening penetration with existing customers.
In another report released today, Needham also reiterated a Buy rating on the stock with a $4.00 price target.
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Based on the recent corporate insider activity of 45 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of NRDY in relation to earlier this year.
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Nerdy (NRDY) Company Description:
Nerdy operates as a platform offering live online learning. The company’s proprietary platform leverages technology like artificial intelligence to connect learners, including students, users, parents, and purchasers of all age groups, to experts that include subject matter experts, tutors, instructors, and educators.
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