Udemy (UDMY) Shares Have Failed to Rally After IPO but Analysts Stay Mostly Bullish

November 23, 2021 10:56 AM EST
Get Alerts UDMY Hot Sheet
Price: $27.48 +1.10%

Rating Summary:
    8 Buy, 3 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 9 | Down: 11 | New: 61
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Educational tech company Udemy (NASDAQ: UDMY) made its stock market debut last month after selling 14.5 million shares at the top of a marketed range of $27 to $29 to raise $421 million.

However, Udemy shares closed 6.4% lower on its IPO debut to value the business at around $3.7 billion, about 10% higher compared to the $3.3 billion the company fetched last year in the private market.

At least 11 Street firms started research coverage on Udemy today with 8 initiating at But or equivalent and 3 at Neutral.

The average price target for Udemy stock is $38.44, signaling a nearly 35% upside from current levels.

Jefferies analyst Brent Thill started at Hold with a $32.00 per share price target given in-line valuation with peers, although he notes Udemy is one of the best digital learning platforms around.

“Education's shift from offline to online has been accelerated by the pandemic, with Udemy being a primary beneficiary. We believe online education platforms such as Udemy are in the early innings of adoption, and expect business's efforts to up-skill and re-skill workers will be a key driver of growth. Competition in the space is fierce, with competitors such as COUR, TWOU (edX), MSFT (LinkedIn Learning) among others, but we believe UDMY is well positioned with a large and broad catalog and over 44M learners to date,” Thill said in a client note.

Needham & Company analyst Ryan McDonald is more bullish on Udemy as he starts with a Buy and a $37.00 per share price target.

“Given the increasing prioritization of talent retention and development in a post-pandemic environment of record employee turnover, we believe Udemy will grow its share of a large TAM that we size at $15.8B - $20.1B. We expect Udemy's mix shift to favor margin-accretive enterprise revenue, and to result in 25%+ growth in FY22 and GM expansion. Given this dynamic, we view the current discounted EV/Sales valuation of 6.6x our FY22 estimate as attractive,” McDonald said in a note sent to clients.

Udemy shares are down 4.7% today as the tech selloff continues.

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