Udemy, Inc. (NASDAQ:UDMY) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Udemy, Inc., a learning company, that operates a marketplace platform for learning skills in North America, Europe, the Middle East, Africa, the Asia Pacific, and Latin America. The US$1.3b market-cap company announced a latest loss of US$85m on 31 December 2024 for its most recent financial year result. As path to profitability is the topic on Udemy's investors mind, we've decided to gauge market sentiment. We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

According to the 13 industry analysts covering Udemy, the consensus is that breakeven is near. They anticipate the company to incur a final loss in 2025, before generating positive profits of US$24m in 2026. So, the company is predicted to breakeven just over a year from today. In order to meet this breakeven date, we calculated the rate at which the company must grow year-on-year. It turns out an average annual growth rate of 57% is expected, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

We're not going to go through company-specific developments for Udemy given that this is a high-level summary, but, bear in mind that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

View our latest analysis for Udemy

Before we wrap up, there’s one aspect worth mentioning. Udemy currently has no debt on its balance sheet, which is quite unusual for a cash-burning growth company, which typically has high debt relative to its equity. This means that the company has been operating purely on its equity investment and has no debt burden. This aspect reduces the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on Udemy, so if you are interested in understanding the company at a deeper level, take a look at Udemy's company page on Simply Wall St. We've also put together a list of relevant factors you should look at:

1. Valuation: What is Udemy worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Udemy is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Udemy’s board and the CEO’s background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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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.