Udemy’s Strategic Growth and AI Focus Justify Buy Rating

Canaccord Genuity analyst Jason Tilchen maintained a Buy rating on Udemy Inc (UDMY – Research Report) yesterday and set a price target of $12.00.

Jason Tilchen has given his Buy rating due to a combination of factors that highlight Udemy’s strong performance and strategic positioning. The company reported impressive first-quarter results, surpassing expectations in both revenue and profitability. This success is attributed to Udemy’s strategic shift towards upmarket Enterprise resources, securing significant deals such as a comprehensive expansion with a major consulting firm and becoming the preferred reskilling platform for a company consolidating its learning vendors.
Additionally, Udemy is well-positioned to capitalize on the growing demand for AI-related skills, supported by its extensive catalog of AI content. Despite a conservative revenue outlook for FY25 due to macroeconomic uncertainties, the company is making strategic moves to enhance its consumer subscriptions and transition into an AI-powered reskilling platform. These initiatives, coupled with a robust Enterprise segment performance and innovative offerings like Career Accelerators, underpin the positive outlook and justify the Buy rating.

In another report released today, Needham also reiterated a Buy rating on the stock with a $11.00 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.