Udemy, Inc. (NASDAQ:UDMY) Just Reported, And Analysts Assigned A US$11.18 Price Target

Last week, you might have seen that Udemy, Inc. (NASDAQ:UDMY) released its quarterly result to the market. The early response was not positive, with shares down 2.7% to US$8.04 in the past week. The statutory results were not great - while revenues of US$195m were in line with expectations,Udemy lost US$0.17 a share in the process. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for Udemy

Taking into account the latest results, the current consensus from Udemy's 13 analysts is for revenues of US$811.3m in 2025. This would reflect a modest 4.5% increase on its revenue over the past 12 months. Losses are predicted to fall substantially, shrinking 59% to US$0.27. Before this latest report, the consensus had been expecting revenues of US$841.2m and US$0.31 per share in losses. While the revenue estimates fell, sentiment seems to have improved, with the analysts making a favorable reduction in losses per share in particular.

The consensus price target fell 7.3% to US$11.18, with the dip in revenue estimates clearly souring sentiment, despite the forecast reduction in losses. 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. There are some variant perceptions on Udemy, with the most bullish analyst valuing it at US$20.00 and the most bearish at US$7.50 per share. As you can see the range of estimates is wide, with the lowest valuation coming in at less than half the most bullish estimate, suggesting there are some strongly diverging views on how analysts think this business will perform. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the 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. We would highlight that Udemy's revenue growth is expected to slow, with the forecast 3.6% annualised growth rate until the end of 2025 being well below the historical 17% p.a. growth over the last five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 11% annually. 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 important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. With that said, earnings are more important to the long-term value of the business. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. 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..

It is also worth noting that we have found 1 warning sign for Udemy that you need to take into consideration.

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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.