This post was last updated on January 24th, 2021 at 02:52 pm
Course Hero IPO, Why Course Hero Will Never IPO Like Chegg Did
Course Hero was by far one of my favorite study tools in college, yet as a company their revenue cannot compete on the same level that Chegg study can, with revenue in the high hundreds of millions of dollars per year in annual revenue. Personally, I only used Course Hero as kind of the backup to Chegg study when I could not find what I needed on there, and I know that the majority of college students think the exact same way. In this blog post, we will explore the possibility of a Course Hero IPO, and will look at how much the company could possibly IPO at. For more information on all things Finance, be sure to comment down below and subscribe to our blog for our weekly newsletter.
The other top college market IPO potentialities include the following:
And a host of other similar and related companies, read on or subscribe to our blog for additional details and information.
Why There Will Probably Never Be a Course Hero IPO, And Why The Current Financials Just Don’t Support an Initial Public Offering
So let’s look at the financials of Course Hero in order to support my opinion here, namely comparing the financials of a website like Course Hero, with the only College study market service out there, Chegg.
-Chegg maintains an annual revenue of well over $300,000,000.00 per year, with a bottom line profit of somewhere around $40-$50,000,000.00 per year. They also have 3,100,000 paid subscribers, and are increasing this number by 30% or so per year. As of the end of 2020, they are on track to hit around 4,000,000 subscribers. All of this leads to them having a public stock price of $70 per share, and a market capitalization of nearly $10,000,000,000.00, that’s right, $10 Billion, technically a large cap stock now, for their college market enterprise. From here, we can look at Course Hero…
-Course Hero does not directly publicize their financial information, however it does look like they recently secured around $150 Million in additional funding, and that this now gives them a valuation of somewhere close to $1.1 Billion, so they are closer than you would think to an IPO, however still not in the range that most underwriters like to see before taking a chance on a major corporation. With this being said, it does look like that as of 2019, Course Hero maintains an annual revenue of around $100,000,000.00, so with a little more public exposure and news about the stock, and maybe another 4-5 years of subscriber growth, they could very well be primed for an IPO. And while they will never have an opening valuation like say, Snowflake, of $100 Billion, saying that one day Course Hero is worth $5 Billion is definitely not out of the question. If they can ever pull off the financials, look for Course Hero to IPO sometime around the year 2025, if they do at all. For now however, Chegg still holds a foothold on the overall college homework market, and I only see that getting better for them as we head into the future.
Course Hero vs. Chegg, And Why Chegg Takes the Cake As Far As Value for Money in This Heated College Market War
I can say pretty comfortably that Chegg is definitely the better software, and that they have a much better market overall for the amount you pay for the product. The free version of Chegg also has better information, with Course Hero almost entirely greyed out until you pay $9.99 a month for their recurring subscriptions revenues. Course Hero, while it is a little bit cheaper, is also definitely a sub-par product, and while you can find about 80% of the homework problems on that site (they certainly have a lot of Google rankings that’s for sure) they don’t have the name brand and recognition that Chegg has, and overall it is a lot harder to use their software for studying.
Final Thoughts on the Course Hero IPO, Why This Stock is Not Primed to Go Public
Overall, Course Hero is definitely a massive internet company, with a valuation of well over $1 Billion currently, there’s no doubting that. But they will never quite be as big in scale or as good in quality as Chegg study is, and it is very likely that Chegg will continue to dominate the college study and homework market for many many years to come. Even with their reduced prices, the quality of Course Hero simply cannot out match what Chegg produces in their product, and I also think that Chegg’s current stock momentum is going to be very hard to beat. From what I can tell you many students see these products as almost a necessity towards their futures, so there is definitely a market for paying $15 a month for homework help and cheap textbooks. What do you think of Course Hero potentially going public, leave a comment down below and tell us what you think, and be sure to subscribe to our blog for weekly finance news sent straight to your inbox.
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