Udemy (UDMY) Stock Forecast & Price Target

Udemy Inc. has demonstrated positive financial trends, with the Enterprise segment achieving a revenue growth of 5.0% year-over-year, contributing significantly to 67.9% of total revenue, driven by strong new customer adoption and robust large deal activity. The company reported an annual recurring revenue (ARR) of $520 million, alongside a 2% growth in total Enterprise customers, indicating a steady demand for its offerings. Additionally, the gross margin for the Consumer segment expanded by 300 basis points year-over-year to 57.0%, supported by the rising popularity of consumer subscriptions, highlighting efficient cost management and revenue diversification.

Udemy Inc. is experiencing a negative outlook primarily due to declining consumer revenues, which fell 9.2% year-over-year in Q3, highlighting challenges in stabilizing this segment while also encountering reduced average monthly buyers. The company's guidance for Q4 predicts a revenue decline of 3-5% year-over-year, primarily driven by significant downturns in consumer revenue, which is expected to decline in the high teens, despite modest growth in the Enterprise segment. Furthermore, there is a need for product investments and a slower conversion of new Enterprise deals, which, combined with an overall revision of revenue estimates for FY26 and beyond, indicates ongoing financial pressure.