Nafeesa Gupta, an analyst from Bank of America Securities, reiterated the Hold rating on Udemy Inc (UDMY – Research Report). The associated price target is $8.00.
Nafeesa Gupta’s rating is based on several factors impacting Udemy Inc’s current and future performance. The company is experiencing ongoing revenue pressure due to challenging macroeconomic conditions, which is reflected in the cautious outlook for the second quarter and full fiscal year. Despite management’s strategic focus on expanding within large enterprises and forming strategic partnerships, the recent transition to a new CEO adds an element of uncertainty.
Moreover, there are signs of deceleration in user engagement, with web and app usage data showing declines, indicating potential softness in consumer spending. Although the company is expected to improve its margins by adjusting revenue share and focusing on larger enterprises, the overall growth outlook remains cautious. The risks of reduced consumer transactions and potential weaknesses in enterprise contract renewals further contribute to the Hold rating. However, the enterprise-focused revenue model and potential for upskilling in a tight labor market offer some positive prospects.
In another report released on April 7, Truist Financial also downgraded the stock to a Hold with a $7.00 price target.
Based on the recent corporate insider activity of 77 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of UDMY in relation to earlier this year.