Nerdy (NRDY) Stock Forecast & Price Target

Nerdy Inc. has successfully expanded its user base through a freemium strategy, enabling an additional 1.1 million students in the third quarter, bringing total penetration to 4.4 million across 900 districts. The company anticipates a notable increase in consumer engagement moving into 2025, with a year-over-year growth of 26% in 4Q24 and improved new customer retention rates. Furthermore, operational efficiencies have been realized, particularly through leverage across General and Administrative spending, as well as an uptick in deal volume from Varsity Tutors for Schools, resulting in $8.5 million of bookings from 117 paid contracts.

Nerdy Inc. has experienced a decline in Consumer revenues of 7.5% year-over-year, amounting to $31.9 million, primarily due to higher than anticipated cancellations among low-frequency members, particularly affecting its lower-priced products. The company reported a total revenue decline of 6.9% year-over-year, with challenges in retention and declining performance in its institutional segment, evidenced by a 2.7% revenue contraction within the Varsity Tutors for Schools business in the third quarter. Additionally, despite some positive surprises in quarterly earnings, forward guidance has been lowered, with 2025 revenue and EBITDA expectations falling significantly below consensus estimates, indicating ongoing pressure on financial performance.