Nerdy Inc

Nerdy Inc (NYSE: NRDY) operates a platform for live online learning. The Company's platform leverages technology, including artificial intelligence (AI), to connect students, users, parents, guardians, and purchasers of all ages to tutors, instructors, subject matter experts, educators, and other professionals.

Recent Financial and Business Updates:

• Revenue Outperformance: In the first quarter, Nerdy's revenue reached USD 49.2 million, surpassing the upper end of their guidance range of USD 45-47 million. The growth was driven by increased adoption of recurring revenue products, strong Learning Memberships, expanded lifetime value, and growth in the Consumer business alongside the scaling of the Institutional business.
• Strong Growth in Learning Memberships: Learning Membership revenue showed significant progress, accounting for 60% of total revenue in the first quarter, compared to 50% in the previous quarter. The annualized run rate for Learning Memberships reached USD 143 million, reflecting a substantial increase from USD 87 million at the end of 2022 and almost no revenue in the same quarter last year.
• Institutional Business Expansion: The Institutional business continued to grow, with Varsity Tutors for Schools securing a record 97 contracts, generating USD 6.3 million in bookings. Record Institutional revenue of USD 8.5 million represented a 32% year-over-year increase and constituted 17% of total revenue in the first quarter.
• Positive Non-GAAP Adjusted Net Earnings and Adjusted EBITDA: Nerdy achieved positive adjusted net earnings of USD 0.5 million in the first quarter, excluding non-cash stock compensation and derivative adjustments, compared to an adjusted net loss of USD 8.2 million in the same period last year. Adjusted EBITDA improved significantly, reaching USD 1.4 million, a substantial improvement compared to the USD 6.6 million loss in the first quarter of the previous year. These improvements were driven by higher revenues, sales, and marketing efficiencies, and streamlining of operations.
• Strong Free Cash Flow and Liquidity: Nerdy reported positive cash flow from operating activities of USD 6.8 million in the first quarter, resulting in increased cash and cash equivalent balances of USD 5.8 million during the quarter. The company holds no debt and has USD 96.5 million in cash on hand, providing sufficient liquidity for business operations and growth initiatives.
• Raised Full Year Guidance: Based on their positive momentum, Nerdy raised its full-year revenue guidance, projecting revenue in the range of USD 193-200 million for 2023, indicating a 21% growth at the midpoint compared to 2022. The company also expects sequential year-over-year revenue growth each quarter throughout 2023. Additionally, they raised their adjusted EBITDA guidance, targeting a loss in the range of USD 7 million to breakeven for the full year, reflecting the benefits from recurring revenue products and operating efficiencies.
• Nerdy Inc. made an official announcement regarding the release of its second-quarter financial results for the period ending June 30, 2023. The results are scheduled to be disclosed after the U.S. stock market closes on Tuesday, August 8, 2023. Following the release, Nerdy's management will conduct a conference call and webcast at 5:00 p.m. Eastern Time, during which they will delve into the company's financial performance and operational results.
  

Technical Observation (on the daily chart)

Currently, the stock is near an important resistance range of USD 4.50-USD 5.00, from where price has taken resistances in the past. A breakout in upward direction from this range would likely initiate a new short-term trend in the up direction. The RSI (14 period) momentum indicator is at a value of 56.17, correcting from the overbought zone, with expectations of some consolidation or a short-term correction. Moreover, the price is currently positioned above both the 21-day SMA and 50-day SMA trend-following indicators, which may act as dynamic short-term support levels.

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As per the above-mentioned price action, recent key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a ‘Watch’ rating has been given to Nerdy Inc (NYSE: NRDY) at the current price of USD 4.31 as of July 26, 2023, at 09:50 am PDT.

Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario. 

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing. 

Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc.

How to Read the Charts?

The Green colour line reflects the 21-period simple moving average (SMA) while the red line indicates the 50- period simple moving average (SMA). SMA helps to identify existing price trends. If the prices are trading above the 21-period and 50-period moving average, then it shows prices are currently trading in a bullish trend.

The Black colour line in the chart’s lower segment reflects the Relative Strength Index (14-Period) which indicates price momentum and signals momentum in trend. A reading of 70 or above suggests overbought status while a reading of 30 or below suggests an oversold status.

The Blue colour bars in the chart’s lower segment show the volume of the stock. The volume is the number of shares that changed hands during a given day. Stocks with high volumes are more liquid than stocks with lesser volume as liquidity in stocks helps in easier and faster execution of the order.

The Orange colour lines are the trend lines drawn by connecting two or more price points and used for trend identification purposes. The trend line also acts as a line of support and resistance.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock. 

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock. 

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices. 

The reference date for all price data, currency, technical indicators, support, and resistance levels is July 26, 2023. The reference data in this report has been partly sourced from REFINITIV. 

Abbreviations

CMP: Current Market Price

SMA: Simple Moving Average

RSI: Relative Strength Index

USD: United States dollar 

Note: Trading decisions require a thorough analysis by individual. Technical reports in general chart out metrics that may be assessed by individuals before any stock evaluation. The above are illustrative analytical factors used for evaluating the stocks; other parameters can be looked at along with additional risks per se. Past performance is neither an indicator nor a guarantee of future performance.

Disclaimer

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