Analyst Estimates: Here's What Brokers Think Of Udemy, Inc. (NASDAQ:UDMY) After Its First-Quarter Report

The first-quarter results for Udemy, Inc. (NASDAQ:UDMY) were released last week, making it a good time to revisit its performance. Revenues of US$197m arrived in line with expectations, although statutory losses per share were US$0.12, an impressive 26% smaller than what broker models predicted. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for Udemy

Taking into account the latest results, the consensus forecast from Udemy's eleven analysts is for revenues of US$799.3m in 2024. This reflects a satisfactory 6.7% improvement in revenue compared to the last 12 months. Losses are expected to hold steady at around US$0.52. Before this latest report, the consensus had been expecting revenues of US$802.5m and US$0.57 per share in losses. So there seems to have been a moderate uplift in analyst sentiment with the latest consensus release, given the upgrade to loss per share forecasts for this year.

The average price target held steady at US$14.61, seeming to indicate that business is performing in line with expectations. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Udemy at US$20.00 per share, while the most bearish prices it at US$11.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Udemy's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Udemy's revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 9.0% growth on an annualised basis. This is compared to a historical growth rate of 17% over the past three years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 11% per year. Factoring in the forecast slowdown in growth, it seems obvious that Udemy is also expected to grow slower than other industry participants.

The Bottom Line

The most obvious conclusion is that the analysts made no changes to their forecasts for a loss next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Udemy's revenue is expected to perform worse than the wider industry. The consensus price target held steady at US$14.61, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Udemy. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Udemy going out to 2026, and you can see them free on our platform here..

However, before you get too enthused, we've discovered 3 warning signs for Udemy that you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.