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On Friday, Cantor Fitzgerald analyst Brett Knoblauch reaffirmed an Overweight rating on Udemy Inc (NASDAQ:UDMY), with a steady price target of $11.00. This target aligns with broader market sentiment, as InvestingPro data shows analyst targets ranging from $7.50 to $14.00, with the company currently appearing undervalued based on Fair Value analysis. Knoblauch's outlook for the online learning company is positive, citing strategic enhancements to the product roadmap as a key factor in stabilizing the Consumer segment. The analyst pointed to the recent adjustments in marketing investments and macroeconomic conditions as having been addressed, setting the stage for potential recovery.
Knoblauch expressed confidence in the ability of learning content leaders like Udemy and Coursera to make a gradual comeback over the year. He emphasized the strength of their financial positions, describing them as having "fortress balance sheets" that enable them to endure challenging periods with patience. Indeed, InvestingPro data confirms this assessment, showing Udemy holds more cash than debt with a low debt-to-equity ratio of just 0.06. The platform offers 8 more key insights about Udemy's financial health, available with a subscription.
The analyst also spotlighted Udemy's advantage in the market due to its agility in releasing the latest and most sought-after courses quickly. This capability is exemplified by Udemy's rapid deployment of courses such as those from DeepSeek (Private), which can be launched in just a matter of days. The company's operational efficiency is reflected in its impressive 61% gross profit margin and 10% year-over-year revenue growth to $776 million in the last twelve months.
Udemy's position as a first mover in the online learning space, according to Knoblauch, gives the company a competitive edge. This agility in course development and release is seen as a significant differentiator that could contribute to the company's recovery and growth in the online learning industry.
The reaffirmation of the $11.00 price target suggests that Cantor Fitzgerald sees a steady outlook for Udemy's stock, with the current strategies and market positioning expected to support the company's performance going forward.
In other recent news, Udemy reported a successful fourth quarter with earnings and revenue surpassing analyst expectations. The online education platform noted adjusted earnings per share at $0.10, higher than the predicted $0.06, and revenue at $199.9 million, a 5% increase year-over-year and above the projected $194.71 million. Notably, Udemy's enterprise segment, Udemy Business, saw a 13% growth in revenue, reaching $130.1 million.
Despite these achievements, Udemy's guidance for the first quarter of 2025 fell short of expectations, forecasting revenue between $195 million and $199 million, which is below the analyst consensus of $201.4 million. Nevertheless, Udemy's President and CEO, Greg Brown, stated that the company is making significant progress and is on track with its strategic pivot to focus resources on serving large enterprise customers.
For the full year 2024, the company's total revenue increased by 8% to $786.6 million, with the enterprise segment growing 18% to $494.5 million. Udemy Business Annual Recurring Revenue (ARR) also rose 11% year-over-year to $516.9 million, indicating continued growth in its enterprise offerings. These recent developments suggest a strong emphasis on Udemy's enterprise sector amidst a slight decline in the consumer segment.
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