UDMY Should I Buy
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Udemy Inc. is not a strong buy for a beginner, long-term investor at this time. The stock is underperforming in pre-market trading, hedge funds are selling heavily, and the company's financial performance has shown significant declines in revenue, net income, and EPS. While there are some positive developments, such as AI-related product advancements and partnerships, the overall sentiment and financial health do not support a confident long-term investment decision.
The MACD is positive and expanding, indicating bullish momentum. However, RSI is neutral, and moving averages are converging, suggesting no strong trend. The stock is trading near its resistance level (R1: 5.269), which could act as a barrier for further upward movement.
Udemy's partnership with AWS and the launch of comprehensive certification resources are positive developments. The company is also seeing strong demand for certification-based skills validation, with over 10 million enrollments in its courses last year.
The company is being sold to Coursera, which may create uncertainty for Udemy shareholders. Hedge funds are selling heavily, and the stock is down in pre-market trading. Additionally, the financial performance in Q4 2025 showed significant declines in revenue, net income, and EPS.
In Q4 2025, revenue dropped by 2.98% YoY to $193.99 million. Net income decreased by 76.39% YoY to -$2.33 million, and EPS fell by 71.43% YoY to -$0.02. Gross margin increased slightly to 66.01%, up 3.76% YoY.
Canaccord analyst Jason Tilchen lowered the price target from $7 to $5 and maintained a Hold rating. The analyst acknowledged solid Q4 results but noted the company's shift upmarket and AI-related content as positive developments.
