Udemy (UDMY) Stock Forecast & Price Target

Udemy Inc. demonstrated a robust financial performance with total revenues increasing by 5.5% year-over-year, largely propelled by significant growth in the Enterprise segment, which accounted for 65% of total revenue following a 13.4% increase. The Consumer segment also showed improvement, with gross margin expanding by 187 basis points to 53% in the fourth quarter, supported by the strength of consumer subscriptions that now comprise over 10% of segment revenues. Additionally, the company reported an adjusted EBITDA of $19.5 million, significantly surpassing previous estimates, indicating effective cost management alongside revenue growth.

Udemy Inc. has reported a significant decline in consumer revenues, with a 6.8% year-over-year decrease in the fourth quarter, despite exceeding internal estimates. Furthermore, the company’s net dollar retention rate (NDRR) has declined to 98% from 99%, indicating challenges in customer upsells, while the enterprise segment is also experiencing weakness with NDRR dropping for larger customers. Additionally, projected revenue growth for the first quarter of 2025 is modest at 0.1%, which falls short of market expectations, highlighting ongoing operational headwinds and a deceleration in growth across key segments.