NRDY

$NRDY CEO Bets Big with $20M Share Purchases on Undervaluation...Will AI Platform Pay Off?

11/28/2025 14:02

Online education platform $NRDY (Nerdy Inc.) is attracting investor attention as the company shows signs of recovery following a dramatic stock crash in August 2024, with unprecedented CEO share purchases and operational improvements highlighting its undervalued appeal. Nerdy operates personalized online tutoring services through its flagship Varsity Tutors platform, serving K-12 through adult learners with one-on-one online education. While the company benefited from surging online education demand during the COVID-19 pandemic, it faced challenges from slowing growth and intensifying competition post-pandemic. Most notably, CEO Charles Cohn has embarked on aggressive share purchases since June 2024, reaching a crescendo during the August stock collapse. On August 16 alone, he purchased approximately 10.99 million shares at $0.90, investing nearly $10 million, followed by an additional 2.17 million shares at $1.03 on August 19. His total stock purchases throughout 2024 exceeded $20 million. This buying pattern continued into 2025, with Cohn's most recent purchases in November 2025 ranging from $0.91 to $1.16 per share. Between November 19-25, he acquired approximately 1.09 million additional shares, investing over $1.1 million, signaling strong conviction in the company's long-term prospects. Conversely, sales by CFO Jason Pello and CLO Christopher Swenson primarily serve tax obligations from RSU vesting, representing routine, smaller transactions distinct from the CEO's massive purchases. Financially, while $NRDY faces challenges, recent improvement signals are emerging. Q3 2025 revenue of $37 million declined only 1% year-over-year, meeting company guidance. Notably, adjusted EBITDA loss of $10.2 million outperformed guidance, while learning membership revenue grew 4%, demonstrating core business stability. Strategic changes deserve attention. The company launched AI-native Live Learning Platform 2.0 to improve operational efficiency while implementing cost controls and price increases to enhance margins. Additionally, securing a $50 million term loan strengthened financial stability. Currently trading around $1.27, $NRDY represents approximately a 57% discount to the analyst consensus 12-month price target of $2.00. While analyst consensus remains 'Hold,' substantial upside potential exists. The stock chart shows gradual recovery from August 2024 lows near $0.80, reaching $1.97 in February 2025 before consolidating in the $1.20-1.80 range over recent months. Investors should note that the CEO's continuous purchases appear systematic rather than mere 'averaging down.' Cohn trades through Rarefied Air Capital LLC, owned by three trusts, and holds RSUs exercisable upon achieving specific share price milestones, creating strong incentives for stock appreciation. However, risks remain. Online education market competition intensifies while post-pandemic growth momentum continues slowing. Revenue decline trends haven't fully reversed. Q4 2025 outlook shows revenue guidance of $45-47 million, suggesting substantial improvement from Q3. Whether this represents temporary uplift or sustainable recovery requires monitoring. Current macroeconomic conditions may favor $NRDY. With November 2025 U.S. markets highlighting undervalued opportunities, $NRDY's combination of strong insider buying and operational improvements positions it as an attractive potential investment. Overall, while $NRDY faces current challenges, the convergence of the CEO's strong conviction, operational improvements, and significant undervaluation creates an intriguing medium-to-long-term investment opportunity. However, education technology sector uncertainties and incomplete earnings recovery warrant cautious approach.