When Will Udemy, Inc. (NASDAQ:UDMY) Turn A Profit?

With the business potentially at an important milestone, we thought we'd take a closer look at Udemy, Inc.'s (NASDAQ:UDMY) future prospects. Udemy, Inc., a learning company, that operates a marketplace platform for learning skills in North America, Europe, the Middle East, Africa, the Asia Pacific, and Latin America. The US$1.0b market-cap company’s loss lessened since it announced a US$85m loss in the full financial year, compared to the latest trailing-twelve-month loss of US$69m, as it approaches breakeven. As path to profitability is the topic on Udemy's investors mind, we've decided to gauge market sentiment. In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

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According to the 12 industry analysts covering Udemy, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2025, before generating positive profits of US$33m in 2026. Therefore, the company is expected to breakeven just over a year from now. How fast will the company have to grow each year in order to reach the breakeven point by 2026? Working backwards from analyst estimates, it turns out that they expect the company to grow 62% year-on-year, on average, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

We're not going to go through company-specific developments for Udemy given that this is a high-level summary, but, bear in mind that by and large a high forecast growth rate is not unusual for a company that is currently undergoing an investment period.

See our latest analysis for Udemy

One thing we’d like to point out is that Udemy has no debt on its balance sheet, which is rare for a loss-making growth company, which typically has high debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.

Next Steps:

There are key fundamentals of Udemy which are not covered in this article, but we must stress again that this is merely a basic overview. For a more comprehensive look at Udemy, take a look at Udemy's company page on Simply Wall St. We've also put together a list of relevant factors you should look at:

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.