Charles K. Cohn, the Chief Executive Officer of Nerdy Inc. (NYSE:NRDY), recently acquired a substantial amount of the company's Class A Common Stock. According to a recent SEC filing, Cohn purchased 746,335 shares at a weighted average price of $1.23 per share on November 20, totaling approximately $917,992. This transaction was carried out through the Cohn Family Trust U/A/D 3/16/2017.
Following this acquisition, Cohn's indirect ownership through various trusts and entities includes 24,223,884 shares, while his direct ownership stands at 9,258,298 shares. The shares were acquired in multiple transactions at prices ranging from $1.19 to $1.25. This strategic move underscores Cohn's continued confidence in Nerdy Inc.'s future prospects.
In other recent news, Nerdy, Inc. reported mixed results in its third-quarter earnings, with a 7% year-over-year decline in revenue, totaling $37.5 million. Despite this, the company saw an increase in active members, and 32% of paid contracts came from school districts shifting from free to paid services. The company's Consumer Learning Memberships generated $31.4 million, accounting for 84% of total revenue. However, institutional business revenue declined by 3% year-over-year to $5.4 million. Looking ahead, Nerdy, Inc. anticipates Q4 revenue to be between $44 million and $47 million, with full-year revenue estimates ranging from $186 million to $189 million.
Canaccord Genuity (TSX:CF) adjusted its outlook on Nerdy, reducing the price target to $2.50 from the previous $3.00, while maintaining a Hold rating on the stock. This follows a decline in consumer revenue due to challenges with its Learning Membership offerings. Despite the dip in consumer revenue, Nerdy expanded its reach by providing free access to Varsity Tutors for Schools for an additional 1.1 million students. However, the company's guidance for the fourth quarter indicates revenues and adjusted EBITDA significantly below market expectations. Canaccord anticipates that some of Nerdy's current challenges will continue into the first half of 2025, with an improvement in fundamentals expected starting in fiscal year 2026.
InvestingPro Insights
Charles K. Cohn's recent substantial purchase of Nerdy Inc. (NYSE:NRDY) shares aligns with several positive indicators highlighted by InvestingPro. The company's impressive gross profit margins, as noted in an InvestingPro Tip, suggest strong pricing power and efficient cost management. This could be a factor in Cohn's decision to increase his stake, as it indicates potential for future profitability.
Moreover, the InvestingPro data shows that Nerdy's gross profit margin for the last twelve months as of Q3 2024 stands at a robust 68.78%, further supporting the company's operational efficiency. This high margin could provide a cushion for the company as it navigates towards profitability.
Another relevant InvestingPro Tip points out that Nerdy holds more cash than debt on its balance sheet. This strong liquidity position, combined with the fact that liquid assets exceed short-term obligations, suggests financial stability and flexibility for future growth initiatives.
It's worth noting that Nerdy has experienced significant returns over the last week, month, and three months, with the 1-week price total return at an impressive 46.46%. This recent positive momentum might have influenced Cohn's timing for his share purchase.
However, potential investors should be aware that analysts do not anticipate the company to be profitable this year, according to another InvestingPro Tip. This insight, along with 11 additional tips available on InvestingPro, could provide a more comprehensive view of Nerdy's financial outlook.
For readers interested in a deeper analysis, InvestingPro offers a total of 14 tips for Nerdy Inc., providing a broader perspective on the company's financial health and market position.
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