Udemy (NASDAQ:UDMY) Shares Down 6.5% - Should You Sell?

Key Points

• Shares of Udemy (NASDAQ:UDMY) dropped about 6.5% to $4.505 on Wednesday with volume down ~37% vs. average; the stock trades below its 200-day SMA and has a market cap near $650 million and a high P/E (~223).
• Analyst consensus is a Hold with a $9.00 average target (3 Buys, 5 Holds, 1 Sell), and KeyCorp recently downgraded the stock to sector weight.
• Udemy beat Q4 EPS estimates ($0.12 vs. $0.10) but revenue declined 3% YoY to $193.99M and net margin is only 0.48%, while analysts expect full-year EPS of about -0.09, signaling weak underlying profitability.

Udemy, Inc. (NASDAQ:UDMY - Get Free Report)'s share price traded down 6.5% on Wednesday . The stock traded as low as $4.49 and last traded at $4.5050. 1,211,419 shares traded hands during trading, a decline of 37% from the average session volume of 1,910,028 shares. The stock had previously closed at $4.82.

Wall Street Analyst Weigh In

Several analysts have recently weighed in on the stock. KeyCorp lowered shares of Udemy from an "overweight" rating to a "sector weight" rating in a research report on Tuesday, January 13th. Weiss Ratings reiterated a "sell (e+)" rating on shares of Udemy in a research report on Wednesday, January 21st. Finally, Canaccord Genuity Group set a $5.00 target price on shares of Udemy in a research report on Monday, February 9th. Three analysts have rated the stock with a Buy rating, five have issued a Hold rating and one has given a Sell rating to the stock. Based on data from MarketBeat.com, Udemy currently has an average rating of "Hold" and a consensus target price of $9.00.

Udemy Stock Down 7.5%

The stock has a market capitalization of $650.36 million, a price-to-earnings ratio of 223.11 and a beta of 1.68. The stock's 50-day simple moving average is $4.77 and its 200 day simple moving average is $5.45.

Udemy (NASDAQ:UDMY - Get Free Report) last released its quarterly earnings results on Thursday, February 5th. The company reported $0.12 EPS for the quarter, beating analysts' consensus estimates of $0.10 by $0.02. The firm had revenue of $193.99 million for the quarter, compared to analyst estimates of $193.40 million. Udemy had a net margin of 0.48% and a return on equity of 4.84%. The company's revenue for the quarter was down 3.0% compared to the same quarter last year. During the same period in the previous year, the business earned $0.10 earnings per share. As a group, equities research analysts anticipate that Udemy, Inc. will post -0.09 earnings per share for the current year.

Insider Buying and Selling

In other Udemy news, CFO Sarah Blanchard sold 25,000 shares of the business's stock in a transaction dated Friday, March 13th. The shares were sold at an average price of $4.78, for a total value of $119,500.00. Following the transaction, the chief financial officer directly owned 1,455,763 shares in the company, valued at $6,958,547.14. The trade was a 1.69% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available at this hyperlink. 2.10% of the stock is currently owned by company insiders.

Hedge Funds Weigh In On Udemy

Institutional investors and hedge funds have recently added to or reduced their stakes in the company. State of Alaska Department of Revenue acquired a new position in shares of Udemy during the third quarter worth approximately $56,000. Osaic Holdings Inc. acquired a new position in shares of Udemy during the second quarter worth approximately $56,000. WINTON GROUP Ltd acquired a new position in shares of Udemy during the fourth quarter worth approximately $69,000. Royce & Associates LP acquired a new position in shares of Udemy during the fourth quarter worth approximately $70,000. Finally, Caitong International Asset Management Co. Ltd lifted its position in shares of Udemy by 76,393.8% during the fourth quarter. Caitong International Asset Management Co. Ltd now owns 12,239 shares of the company's stock worth $72,000 after purchasing an additional 12,223 shares in the last quarter. 79.48% of the stock is currently owned by institutional investors and hedge funds.

Udemy Company Profile

Udemy, Inc NASDAQ: UDMY operates a leading online learning marketplace that connects learners and instructors across a wide range of subject areas. The company's platform hosts thousands of self-paced video courses covering technology, business, personal development, creative arts and more. Individual learners can purchase courses on demand, while instructors receive revenue share for teaching content to a global audience.

In addition to its consumer-facing marketplace, Udemy provides enterprise learning solutions under the Udemy for Business brand.

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