Udemy (UDMY) Stock Forecast & Price Target

Udemy Inc. has demonstrated a strong financial performance with its Udemy Business segment, which grew 13.4% year-over-year and now accounts for 65% of total revenue, highlighting its significance in the company's overall growth strategy. The Consumer segment also showed improvement, with gross margin expanding by 187 basis points to 53%, driven by the successful adoption of consumer subscriptions, now representing over 10% of segment revenues. Furthermore, the company reported an adjusted EBITDA of $19.5 million, significantly above estimates, indicating strong revenue performance and operational efficiency, while management anticipates continued double-digit growth in the Udemy Business segment post-2025.

Udemy Inc's consumer segment experienced a year-over-year revenue decline of 6.8% in the fourth quarter, despite results exceeding estimates, indicating potential challenges in stabilizing this critical area. Additionally, the company reported a drop in net dollar retention rate (NDRR) to 98%, which reflects a weakening ability to maintain and grow existing customer accounts, particularly among enterprise clients with over 1,000 employees. Furthermore, the revenue guidance for the first quarter of 2025 anticipates only 0.1% growth, falling short of market expectations, which raises concerns about sustained growth in its overall business.