Udemy (UDMY) Stock Forecast & Price Target

Udemy Inc. demonstrated a solid financial performance in its latest quarterly report, with Udemy Business revenue increasing by 5.0% year-over-year to $132.8 million, now constituting 67.9% of total revenue as customer adoption and large deal activity continue to thrive. Additionally, the consumer segment showed encouraging signs, as gross margin improved by 300 basis points year-over-year to 57.0% due to growth in the consumer subscription, which now accounts for 19% of the segment's revenues. Overall, the company reported total revenues rising by 0.2% year-over-year and achieved an adjusted EBITDA of $24.3 million, exceeding estimates and reflecting operational efficiencies alongside revenue growth.

Udemy Inc. is experiencing financial challenges, particularly in its Consumer segment, which reported a year-over-year revenue decline of 9.2% in the third quarter and anticipates further declines in the coming quarter. The company's forecast for Q4 revenue is disappointing, projecting a decline of 3-5% year-over-year, largely driven by pressures from the transition to a subscription model in the Consumer business. Additionally, the negative dynamics in Net Dollar Retention Rate (NDRR), which fell to 93% from 95%, coupled with lowered profitability estimates for FY26 due to a combination of lower revenue projections and needed product investments, contribute to a pessimistic outlook on Udemy's stock.