What Happened?
Shares of online learning platform Udemy (NASDAQ: UDMY) jumped 2.9% in the afternoon session after KeyBanc reiterated its "Overweight" rating on the stock, and the company announced a new strategic partnership.
The investment firm maintained its $9.00 price target after meeting with Udemy executives, expressing "increased confidence in Udemy's NT growth reacceleration." KeyBanc's commentary also highlighted the company's focus on driving subscription revenue and a strong near-term product roadmap. Further boosting sentiment, Udemy announced a partnership with Workera, an AI-powered skills verification platform. This collaboration aimed to create a solution for organizations to measure their workforce's skills, identify gaps, and deliver targeted training through Udemy's courses to address them.
After the initial pop the shares cooled down to $5.60, up 3.2% from previous close.
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What Is The Market Telling Us
Udemy’s shares are very volatile and have had 22 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 10 months ago when the stock gained 32.6% on the news that the company reported strong fourth-quarter results, which beat across the key metrics we track, including sales, EBITDA, and earnings.
It also provided optimistic EBITDA guidance for the next quarter, which outperformed analysts' expectations. Revenue grew year on year, driven by an 18% increase in the Enterprise segment, which offset a decline in the Consumer business. Gross margin expanded significantly given the shift to large enterprise deals, helping adjusted EBITDA beat estimates. EPS benefited from these margin improvements, beating expectations by a noteworthy margin. However, while next quarter's EBITDA outlook was ahead of analysts' estimates, revenue guidance for both the next quarter and full year fell short of Wall Street's expectations. Overall, we think this was still a decent quarter with some key metrics above expectations.
Udemy is down 32.1% since the beginning of the year, and at $5.60 per share, it is trading 44.6% below its 52-week high of $10.10 from February 2025. Investors who bought $1,000 worth of Udemy’s shares at the IPO in October 2021 would now be looking at an investment worth $203.45.
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