Morgan Stanley analyst Josh Baer maintained a Sell rating on Udemy Inc (UDMY – Research Report) today and set a price target of $9.00.
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Josh Baer has given his Sell rating due to a combination of factors influencing Udemy Inc’s future performance. Despite acknowledging the company’s recent cost-saving measures and stronger-than-expected fourth-quarter results, he remains unconvinced about its growth trajectory. Baer notes that the company’s shift in focus upmarket, coupled with reduced investments, is likely to result in weaker growth in the coming years, with revenue projections falling below consensus in fiscal years 2026 and 2027.
Moreover, Baer points out that although there is some margin expansion expected, it may not be significant enough to meet the company’s 2026 and 2027 targets. The anticipated EBITDA and margin rates for these years fall short of expectations, highlighting potential issues in achieving desired financial goals. Additionally, Udemy trades at a considerable premium compared to its competitor, Coursera, which, despite facing its own challenges, suggests that the valuation of Udemy might be overstated.
Based on the recent corporate insider activity of 91 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.