Udemy Inc (UDMY) AI Stock Analysis

• Market Cap: $730.02M
• Dividend Yield: N/A
• Average Volume (3M): 2.18M
• Price to Earnings (P/E): 204.9
• Beta (1Y): 1.32
• Revenue Growth: 2.53%
• EPS Growth: 95.79%
• Country: US
• Employees: 1,246
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Education & Training Services
• EPS (TTM): 0.12
• Shares Outstanding: 145,421,510
• 10 Day Avg. Volume: 1,979,456
• 30 Day Avg. Volume: 2,176,817
• PEG Ratio: -2.18
• Price to Book (P/B): 4.12
• Price to Sales (P/S): 1.10
• P/FCF Ratio: 10.78
• Enterprise Value/Market Cap: 0.69
• Enterprise Value/Revenue: 0.63
• Enterprise Value/Gross Profit: 0.97
• Enterprise Value/Ebitda: 14.65
• 1Y Price Target: $7.75
• Price Target Upside: 65.25% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 5
• EPS Forecast (FY): 0.5
• Revenue Forecast (FY): $806.00M

• Rating: 60 Neutral
• Price Target: $5.50 ▲(17.27% Upside)
• Action: Reiterated Date: 02/12/26
• Date: Action: Reiterated 02/12/26

The score is supported primarily by improving financial performance (stronger cash generation and low leverage) and a constructive earnings outlook driven by subscription momentum and better profitability. These positives are tempered by bearish technicals, a very high P/E valuation, and ongoing near-term headwinds in Consumer revenue and retention, with added uncertainty from the pending merger close.

Positive Factors

Strong cash generation

Sustained positive operating and free cash flow marks a material turnaround from prior years and provides durable internal funding for product investment, AI initiatives and marketing. Robust cash conversion reduces reliance on external financing and supports executing the subscription pivot while absorbing near-term revenue volatility.

Conservative balance sheet

Very low leverage and meaningful equity cushion materially lowers solvency and refinancing risk. This financial flexibility supports strategic investments, potential bolt-on deals or absorbing merger-related costs, giving management runway to prioritize subscription growth and margin improvement without pressing liquidity constraints.

Subscription-first revenue mix

A shift to recurring subscription revenue (now ~74% of sales) increases predictability and lifetime value, improving unit economics and enabling more efficient customer acquisition. Strong consumer subscription growth and incremental Udemy Business ARR diversify revenue sources and support sustainable margin expansion over the medium term.

Negative Factors

Top-line weakness

Falling overall revenue and an anticipated Consumer decline materially raise execution risk: margin gains and positive cash flow are sensitive to revenue stability. If demand softness persists, fixed-cost absorption and investment funding could erode progress, making sustained profitability contingent on re-accelerating top-line growth.

Net dollar retention pressure

Sub-100% net dollar retention indicates customers are downselling, which structurally limits organic revenue expansion per account. Legacy contract shrinkage requires higher new sales or price increases to offset, raising customer success and product development burden to improve stickiness and preserve long-term ARPU and ARR growth.

Merger execution & close risk

The planned Coursera merger offers scale and synergies but depends on further regulatory and shareholder approvals and faces integration risk. Protracted timelines, conditional closing terms and potential distraction of leadership can delay synergy capture and create execution uncertainty that affects structural growth and cost plans.

Udemy Inc Business Overview & Revenue Model

Company Description

Udemy, Inc. operates a marketplace platform for teaching and learning skills in the United States and internationally. The company offers technical and business skills, and personal development courses for individual learners and enterprise customers. Its platform provides 49 million learners with access to approximately 180,000 courses through direct-to-consumer or Udemy Business offerings in approximately 75 languages. The company's courses offer learning objectives, such as reskilling or upskilling in technology and business, and soft skills, as well as learners receive access to interactive learning tools comprising quizzes, exercises, and instructor questions-and-answers. Udemy, Inc. was incorporated in 2010 and is headquartered in San Francisco, California.

How the Company Makes Money

Udemy primarily generates revenue through course sales on its platform. Instructors set prices for their courses, and Udemy takes a percentage of each sale, which can vary based on how the student discovers the course (e.g., through Udemy's marketing or via the instructor's own promotion). Additionally, Udemy offers a subscription model called Udemy Business, where companies pay for access to a curated library of courses for their employees. This enterprise solution is a significant revenue stream, as it allows organizations to provide continuous learning opportunities. Udemy also engages in partnerships with various educational institutions and organizations to expand its course offerings and reach, further enhancing its revenue potential.

Udemy Inc Financial Statement Overview

Summary

Improving fundamentals led by strong TTM free cash flow (~$73M) and positive operating cash flow (~$88M), alongside a conservatively levered balance sheet (debt-to-equity ~0.05). Offsetting this, TTM revenue contraction and still-thin operating profitability keep results sensitive to demand and execution.

Income Statement

UDMY shows strong improvement in profitability versus prior years, moving from deep losses in 2022–2024 to near break-even / slightly positive results in TTM (Trailing-Twelve-Months). Gross margin also improved to ~65% in TTM (Trailing-Twelve-Months) from ~56% in 2022, indicating better unit economics. The key weakness is top-line momentum: revenue growth turns sharply negative in TTM (Trailing-Twelve-Months), and operating profitability remains thin (EBIT roughly around break-even), leaving results sensitive to any re-acceleration in spending or continued demand softness.

Balance Sheet

The balance sheet is conservatively levered, with low debt relative to equity (debt-to-equity ~0.05 in both 2024 and TTM (Trailing-Twelve-Months)), which reduces refinancing and solvency risk. Equity remains meaningful (~$210M in TTM (Trailing-Twelve-Months)), supporting financial flexibility. The primary drawback is that returns on equity are still negative in recent periods (including TTM (Trailing-Twelve-Months)), reflecting that the business has not yet produced sustained profitability despite a healthier capital structure.

Cash Flow

Cash generation is a clear strength: operating cash flow and free cash flow are solidly positive in TTM (Trailing-Twelve-Months) (about $88M and $73M, respectively) and improved versus 2024, with strong free-cash-flow growth. This marks a notable turnaround from the negative cash flow seen in 2021–2023 and suggests improved cost discipline and working-capital dynamics. A watch item is that accounting earnings are still low/volatile, so maintaining strong cash flow while stabilizing revenue will be important.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	789.84M	786.57M	728.94M	629.10M	515.66M
Gross Profit	518.41M	491.94M	419.34M	353.78M	279.63M
EBITDA	33.70M	-89.33M	-78.53M	-129.12M	-63.33M
Net Income	3.81M	-85.29M	-107.29M	-153.88M	-80.03M
Balance Sheet
Total Assets	617.70M	605.63M	741.20M	737.57M	739.85M
Cash, Cash Equivalents and Short-Term Investments	358.74M	354.44M	476.94M	465.37M	534.61M
Total Debt	10.23M	10.82M	6.95M	13.55M	0.00
Total Liabilities	407.24M	408.23M	384.30M	398.26M	350.15M
Stockholders Equity	210.46M	197.39M	356.89M	339.31M	389.70M
Cash Flow
Free Cash Flow	80.42M	38.27M	-15.07M	-76.68M	-25.31M
Operating Cash Flow	86.22M	53.04M	-2.00M	-60.96M	-7.10M
Investing Cash Flow	20.63M	1.08M	-24.97M	-173.23M	-52.69M
Financing Cash Flow	-67.03M	-171.75M	19.20M	14.76M	418.63M

Udemy Inc Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 4.69
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For UDMY, the sentiment is Neutral. The current price of 4.69 is below the 20-day moving average (MA) of 4.82, below the 50-day MA of 5.22, and below the 200-day MA of 6.26, indicating a neutral trend. The MACD of -0.01 indicates Negative momentum. The RSI at 52.12 is Neutral, neither overbought nor oversold. The STOCH value of 63.45 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for UDMY.

Udemy Inc Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AFYA	79 Outperform	$1.22B	9.64	15.51%	<0.01%	3.48%	12.63%
GHC	64 Neutral	$4.58B	15.85	17.20%	0.65%	4.13%	228.37%
COUR	64 Neutral	$1.08B	-20.71	-8.27%	―	8.10%	43.35%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%
UDMY	60 Neutral	$730.02M	204.90	1.87%	―	2.53%	95.79%
DAO	55 Neutral	$1.27B	85.82	―	―	-1.51%	155.73%
GOTU	49 Neutral	$528.55M	-10.20	-21.21%	―	48.81%	61.64%

Udemy Inc Corporate Events

Udemy-Coursera Merger Clears Key FTC Regulatory Hurdle

Udemy, Inc., a leading online learning platform, previously agreed on December 17, 2025, to merge with rival Coursera, Inc. in an all-stock transaction that would combine two of the largest players in digital education and expand their scale in the competitive e-learning market. On January 9, 2026, the companies filed required premerger notifications under the Hart-Scott-Rodino Act, and on February 9, 2026, the U.S. Federal Trade Commission granted early termination of the waiting period, clearing a key regulatory hurdle, though the merger still depends on remaining regulatory approvals and shareholder votes.

The most recent analyst rating on (UDMY) stock is a Hold with a $6.00 price target. To see the full list of analyst forecasts on Udemy Inc stock, see the UDMY Stock Forecast page.

Udemy Accelerates CEO Compensation Amid Planned Coursera Merger

On December 18, 2025, Udemy, Inc. entered into an acceleration agreement with its president and CEO, Hugo Sarrazin, to adjust the timing of certain compensation elements in connection with a planned merger involving Coursera, Inc., with the aim of mitigating his potential tax exposure under Sections 280G and 4999 of the Internal Revenue Code. Under the agreement, a portion of Sarrazin’s 2025 target annual bonus will be paid before year-end 2025 and a substantial block of restricted stock units that was originally set to vest in March 2026 will vest immediately, but both the accelerated cash and equity are subject to repayment or forfeiture on an after-tax basis if he resigns or is terminated for cause before the original bonus payment date or vesting date, effectively keeping the economic value and vesting profile of his compensation materially unchanged while addressing tax and transaction-related considerations.

The most recent analyst rating on (UDMY) stock is a Hold with a $7.00 price target. To see the full list of analyst forecasts on Udemy Inc stock, see the UDMY Stock Forecast page.

Udemy to Merge with Coursera in All-Stock Deal

On December 17, 2025, Udemy entered into a definitive all-stock merger agreement with rival online education provider Coursera under which Chess Merger Sub, a Coursera subsidiary, will merge with Udemy, leaving Udemy as a wholly owned Coursera subsidiary. Udemy shareholders will receive 0.800 Coursera shares for each Udemy share, with no fractional shares issued, and Udemy’s board unanimously approved the deal and recommended that shareholders vote in favor. Outstanding Udemy restricted stock units, performance stock units, options and stock appreciation rights will be converted into Coursera equity awards based on the agreed exchange ratio, preserving existing vesting and other terms, which helps align incentives and provides continuity for employees and management. Post-closing, Coursera’s board will expand to nine members, including three directors from Udemy, while Coursera’s current chair and CEO will remain in place, signaling Coursera’s continued strategic control of the combined company. The transaction is subject to customary closing conditions, including approvals from Udemy and Coursera shareholders, NYSE listing of the new Coursera shares, U.S. antitrust clearance and other regulatory approvals, as well as effectiveness of a registration statement and a tax opinion that the merger qualifies as a reorganization. The merger agreement includes reciprocal termination rights, a termination outside date that can extend as far as June 17, 2027 if regulatory approvals are delayed, and a $40.5 million breakup fee plus an $8 million expense reimbursement mechanism in specified circumstances, underscoring the strategic importance and negotiated protections for both sides. Supporting the deal’s chances of completion, significant shareholders in each company—holding about 12% of Coursera and 26% of Udemy—have entered into voting agreements committing their shares in favor of the transaction and limiting transfers and alternative deal discussions until the requisite approvals are obtained or the merger agreement is terminated.

The most recent analyst rating on (UDMY) stock is a Hold with a $5.50 price target. To see the full list of analyst forecasts on Udemy Inc stock, see the UDMY Stock Forecast page.

Udemy Announces Merger with Coursera for Growth

On December 17, 2025, Udemy and Coursera announced a definitive merger agreement under which Udemy will become a wholly owned subsidiary of Coursera. This strategic move valued at approximately $2.5 billion aims to combine complementary strengths in AI-powered skills development, workforce training, and education, creating a leading global platform with a focus on addressing the growing demand for AI skills. The merger is expected to drive financial growth, generate $115 million in annual cost synergies within 24 months, and enhance innovation in learning experiences globally, positioning the combined company as a transformative force in the evolving education market.

The most recent analyst rating on (UDMY) stock is a Hold with a $5.50 price target. To see the full list of analyst forecasts on Udemy Inc stock, see the UDMY Stock Forecast page.