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Udemy (UDMY) Q3 Earnings Report Preview: What To Look For

StockStory - Wed Nov 1, 2023

UDMY Cover Image

Online learning platform Udemy (NASDAQ:UDMY) will be reporting earnings tomorrow after the bell. Here's what to expect.

Last quarter Udemy reported revenues of $178.2 million, up 16.4% year on year, beating analyst revenue expectations by 2.93%. It was a weaker quarter for the company, with underwhelming revenue guidance for the next quarter and full-year. The company reported 1.34 million active buyers, up 3.88% year on year.

Is Udemy buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting Udemy's revenue to grow 12.5% year on year to $178.2 million, slowing down from the 22.3% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted loss is expected to come in at -$0.02 per share.

Udemy Total Revenue

Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company only missed Wall St's revenue estimates once over the last two years, and has on average exceeded top line expectations by 2.37%.

Looking at Udemy's peers in the consumer subscription segment, some of them have already reported Q3 earnings results, giving us a hint of what we can expect. Coursera delivered top-line growth of 21.4% year on year, beating analyst estimates by 4.21%, and Match reported revenues up 8.9% year on year, exceeding estimates by 0.13%. Coursera traded up 15.6% on the results, and Match was down 3.4%.

Read our full analysis of Coursera's results here and Match's results here.

Technology stocks have been hit hard by fears of higher interest rates, and while some of the consumer subscription stocks have fared somewhat better, they have not been spared, with share price declining 3.56% over the last month. Udemy is down 3.19% during the same time, and is heading into the earnings with analyst price target of $13.4, compared to share price of $9.11.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

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The author has no position in any of the stocks mentioned.