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On Thursday, JPMorgan analyst Noah Herman revised the price target for Udemy Inc (NASDAQ:UDMY) shares, reducing it from $11.00 to $8.00 while maintaining a Neutral rating on the company’s stock. Herman expressed concern about the potential impact of market volatility and internal transitions on Udemy’s performance. The stock, currently trading at $6.64, has seen a significant 33.86% decline over the past year, though InvestingPro data shows an impressive 8.5% return over the last week.
Heading into Udemy’s earnings announcement, Herman noted that the company usually records a significant portion of its bookings in the final month of the quarter. However, he pointed out that the macroeconomic environment began showing signs of volatility in mid-March, which may have affected Udemy’s bookings in the last two weeks of the quarter. This volatility raises questions about the company’s ability to meet its financial targets for the first quarter and the full fiscal year.
Moreover, Herman highlighted that 2025 is seen as a year of transition for Udemy, with a particular focus on moving upmarket. The company also announced a CEO transition in mid-March, introducing further uncertainty regarding the company’s strategic direction. These factors could pose challenges for Udemy as it aims to navigate through this period of change, though the company maintains a strong balance sheet with more cash than debt and achieved $786.57 million in revenue last year.
The full-year revenue guidance from Udemy suggests a modest year-over-year growth improvement from the first quarter. However, given the recent macroeconomic fluctuations and the company’s ongoing transition, Herman anticipates that Udemy’s management may adopt a more conservative approach to guidance.
Investors and stakeholders are now awaiting further details from Udemy’s upcoming earnings report, which will provide more insight into the company’s financial health and its ability to adapt to the evolving business landscape.
In other recent news, Udemy reported fourth-quarter earnings that exceeded analyst expectations. The online learning platform posted adjusted earnings per share of $0.10, surpassing the consensus estimate of $0.06. Revenue for the quarter reached $199.9 million, above the projected $194.71 million, with a 5% year-over-year increase. Despite this strong performance, Udemy provided softer guidance for the first quarter of 2025, forecasting revenue between $195 million and $199 million, below the analyst consensus of $201.4 million. The company’s enterprise segment, Udemy Business, showed a 13% year-over-year revenue growth to $130.1 million, while the consumer segment revenue declined by 7% to $69.8 million.
In leadership news, Udemy announced Hugo Sarrazin as its new CEO, succeeding Greg Brown. Sarrazin’s extensive experience in scaling SaaS businesses and integrating AI into strategies is expected to drive Udemy’s growth. Meanwhile, Cantor Fitzgerald maintained an Overweight rating on Udemy with a price target of $11.00, highlighting strategic enhancements to the product roadmap. Analyst Brett Knoblauch noted Udemy’s agility in releasing new courses quickly as a competitive advantage. These developments reflect Udemy’s strategic focus on expanding its enterprise offerings and innovating in professional skill development.
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