Udemy, Inc. (NASDAQ:UDMY): When Will It Breakeven?

Udemy, Inc. (NASDAQ:UDMY) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Udemy, Inc., a learning company, that operates a marketplace platform for learning skills in the United States and internationally. With the latest financial year loss of US$107m and a trailing-twelve-month loss of US$87m, the US$1.2b market-cap company alleviated its loss by moving closer towards its target of breakeven. As path to profitability is the topic on Udemy's investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

See our latest analysis for Udemy

Udemy is bordering on breakeven, according to the 13 American Consumer Services analysts. They anticipate the company to incur a final loss in 2025, before generating positive profits of US$13m in 2026. Therefore, the company is expected to breakeven roughly 2 years from today. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 61%, which is rather optimistic! If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

Given this is a high-level overview, we won’t go into details of Udemy's upcoming projects, though, take into account that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Before we wrap up, there’s one aspect worth mentioning. Udemy currently has no debt on its balance sheet, which is rare for a loss-making growth company, which usually has a high level of debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.

Next Steps:

There are too many aspects of Udemy to cover in one brief article, but the key fundamentals for the company can all be found in one place – Udemy's company page on Simply Wall St. We've also put together a list of important factors you should further examine:

1. Valuation: What is Udemy worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Udemy is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Udemy’s board and the CEO’s background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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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.