Udemy (UDMY) Stock Forecast & Price Target

Udemy Inc's Enterprise segment generated $132.8 million in revenue, reflecting a 5.0% year-over-year growth, which now constitutes 67.9% of the company's total revenue, highlighting the segment's increasing importance to Udemy's financial performance. Additionally, the Annual Recurring Revenue (ARR) for Udemy Business grew to $520 million, marking a 5.6% year-over-year increase, showcasing strong customer adoption and engagement. The Consumer segment also displayed improvement, with gross margins expanding by 340 basis points year-over-year to 59.6%, bolstered by a rise in consumer subscription revenues, which contributes positively to Udemy's overall financial health.

Udemy Inc has reported a year-over-year decline in Consumer revenues, with a notable 9.2% decrease in the third quarter, signaling challenges in stabilizing the segment despite results being slightly better than prior estimates. The company's guidance for the fourth quarter anticipates a revenue drop of 3-5% year-over-year, which is primarily driven by a significant decline in Consumer revenue projected in the high teens, while Enterprise growth remains limited at approximately 4%. Additionally, there has been a decrease in average monthly buyers, which reflects diminished individual course purchases and necessitates a recalibration of future revenue and profitability estimates due to ongoing product investments and slower transitions to the subscription model.