Goldman Sachs analyst Eric Sheridan reiterated a Hold rating on Nerdy (NRDY – Research Report) today and set a price target of $3.25.
Eric Sheridan has given his Hold rating due to a combination of factors surrounding Nerdy Inc.’s performance and prospects. In the first quarter of 2024, Nerdy outperformed expectations in terms of revenue and adjusted EBITDA, mainly attributed to the growth in its Consumer business and the promising evolution of its Institutional business. The management’s confidence is bolstered by the increased membership and the higher lifetime value (LTV) of the recently improved Learning Membership product. Additionally, the unification of the Consumer and Institutional products into a single user experience is expected to enhance the learning experience and streamline the introduction of new features.
Despite these positive aspects, the Hold rating also takes into account the investments required to expand the Institutional business and the ongoing enhancements to its platform. While management has charted a path to margin expansion, which includes scaling revenue in the second half of the year, operational efficiencies, and growth at more favorable unit economics, these initiatives are yet to fully materialize. Long-term, Nerdy is poised to benefit from secular trends in online interactive learning, its platform-based approach in a fragmented market, and the potential for significant operating leverage. However, at this stage, Sheridan maintains a cautious stance, reflected in the Neutral rating, while acknowledging the company’s strategic positioning and adjusting operating estimates based on the latest earnings report and management’s forward-looking statements.
According to TipRanks, Sheridan is a 5-star analyst with an average return of 12.5% and a 54.64% success rate. Sheridan covers the Communication Services sector, focusing on stocks such as DoorDash, Meta Platforms, and Netflix.
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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.
