Education is quickly changing with the times. Traditional classroom methods aren’t as popular as they once were, simply because technology opens new possibilities. EdTech stocks combine computer technology and current educational practices, shifting the traditional learning paradigm we take for granted.

In theory, EdTech stocks provide more-accessible and affordable education to all. Such a pursuit is a noble one. However, these companies can also improve academic performance, resulting in a more-informed populace. These are the kinds of positive advancements investors should be looking for right now.

Ultimately, these factors converge to create an emerging sector with significant long-term growth potential. EdTech stocks are becoming increasingly relevant, as students reevaluate the tradeoffs between traditional education and newer paradigms.

With that said, here are my top three picks in this sector investors should consider right now.

Chegg (CHGG)

Chegg (NYSE:CHGG) is an EdTech stock that marries traditional education with newer learning paradigms. The company remains firmly rooted in the traditional college route, offering textbooks and college admissions exam services. But it provides all of those products and services in an online format for the digital age.

A few months ago, Chegg saw its share price drop following a mixed earnings report. While earnings exceeded expectations, the company’s guidance for 2023 was lower than expected. Analysts were anticipating a forecast of $782 million this year, so shares fell when the company announced it expected only $745 to $760 million for 2023.

At that time, CHGG stock dipped to around $16 per share, but have since inched toward the $19 level. One strong reason to consider Chegg is the simple catalyst that a recession will result in more students considering college. With a downturn predicted later this year, Chegg will likely see a meaningful increase in demand and sales.

Udemy (UDMY)

Udemy (NASDAQ:UDMY) is an EdTech stock that provides exposure to a major shift in education. The company offers skills-based courses created and taught online by instructors. Think of a professional skill, and Udemy likely has a system for purchase.

There are a few broad metrics that make Udemy particularly appealing. One, it’s pretty big. The company recorded $629 million in sales in 2022, representing 22% growth year-over-year. And two, Udemy has a 115% net dollar retention rate. That means the company expands every dollar of its existing customer base into $1.15 of revenue.

The other fact that sticks out regarding Udemy is just how global its business truly is. The company boasts 1.132 billion English users, 1.117 billion Mandarin language users, more than half a billion Spanish language users, and over 250 million Arabic, French, and Russian users. It is a global EdTech stock for learners everywhere, seeking to learn almost anything.

Coursera (COUR)

Coursera (NYSE:COUR) is similar to Udemy in offering online skills-based training. Both EdTech stocks bear those similarities, but Coursera goes further and offers, as its name suggests, courses. Coursera also has solid connections and university branding that lend it a certain degree of credibility, but at lower pricing than traditional colleges.

The company offers courses, specializations, guided projects, certificates, and degrees in connection with universities. Coursera attracts customers with free university-branded content, some of whom go on to pay for in-person courses and degrees, which then incentivizes content creation and partner revenue.

That business model is working from a growth perspective. Coursera reported $293.5 million in sales in 2020, which grew to $523.8 million in 2022. So, as a growth stock, Coursera certainly has lots of appeal. Yet, simultaneously, Coursera’s losses have continued to grow between 2020 and today. The company’s 2020 net losses of $66.8 million increased to $175.4 million in 2022.

Coursera is part of the shift in education, but investors should understand that it is a growth stock at heart. However, as the Federal Reserve slows its rate hikes, I think COUR stock could be a key beneficiary.

On the date of publication, Alex Sirois did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.