Last week saw the newest third-quarter earnings release from Udemy, Inc. (NASDAQ:UDMY), an important milestone in the company's journey to build a stronger business. Revenues came in at US$195m, in line with expectations, while statutory losses per share were substantially higher than expected, at US$0.17 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Udemy after the latest results.

See our latest analysis for Udemy

Following the latest results, Udemy's 13 analysts are now forecasting revenues of US$811.3m in 2025. This would be a satisfactory 4.5% improvement in revenue compared to the last 12 months. Losses are predicted to fall substantially, shrinking 58% to US$0.27. Before this latest report, the consensus had been expecting revenues of US$841.2m and US$0.31 per share in losses. Although the revenue estimates have fallen somewhat, Udemy'sfuture looks a little different to the past, with a cut to the loss per share forecasts in particular.

The analysts have cut their price target 7.3% to US$11.18per share, suggesting that the declining revenue was a more crucial indicator than the forecast reduction in losses. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Udemy, with the most bullish analyst valuing it at US$20.00 and the most bearish at US$7.50 per share. So we wouldn't be assigning too much credibility to analyst price targets in this case, because there are clearly some widely different views on what kind of performance this business can generate. With this in mind, we wouldn't rely too heavily the consensus price target, as it is just an average and analysts clearly have some deeply divergent views on the business.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. It's pretty clear that there is an expectation that Udemy's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 3.6% growth on an annualised basis. This is compared to a historical growth rate of 17% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 11% per year. Factoring in the forecast slowdown in growth, it seems obvious that Udemy is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing to take away is that the analysts reconfirmed their loss per share estimates for next year. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. Yet - earnings are more important to the intrinsic value of the business. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Udemy going out to 2026, and you can see them free on our platform here.

Even so, be aware that Udemy is showing 1 warning sign in our investment analysis , you should know about...

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.