UDMY Should I Buy
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Udemy Inc. is not a good buy for a beginner, long-term investor at this time. The company's financial performance is weak, with declining revenue, net income, and EPS. Additionally, hedge funds are selling the stock, and there is no significant insider activity to indicate confidence. While the company has positive AI-related initiatives and partnerships with Google, these catalysts are not strong enough to outweigh the negative financial trends and bearish technical indicators. The options data also reflects low trading sentiment. For a beginner investor with a long-term horizon, it would be better to wait for stronger financial performance and clearer upward momentum before considering this stock.
The MACD is positive and expanding, indicating a slight bullish momentum. However, the RSI is neutral, and the moving averages are bearish (SMA_200 > SMA_20 > SMA_5), suggesting a downward trend. The stock is trading near its pivot level of 4.708, with resistance at 4.977 and support at 4.439. Overall, the technical indicators lean bearish.
Udemy has partnered with Google to launch an AI training program and provide AI Professional Certificates, which could attract more learners and enhance its enterprise offerings.
Hedge funds are selling the stock, with a significant increase in selling activity (1269.62% over the last quarter). Financial performance is deteriorating, with declining revenue, net income, and EPS. Analysts have also lowered the price target from $7 to $5.
In Q4 2025, revenue dropped by 2.98% YoY to $193.99M. Net income fell by 76.39% YoY to -$2.33M, and EPS declined by 71.43% YoY to -$0.02. However, gross margin improved slightly by 3.76% YoY to 66.01%. Overall, the financial performance is weak.
Analysts have lowered the price target from $7 to $5, maintaining a Hold rating. While the company has shown progress in its enterprise business and AI-related offerings, the overall sentiment remains cautious due to weak financials.
