Analyst Reaffirms Buy Rating on Udemy as Strategic Partnerships Boost Growth

Needham analyst Ryan MacDonald reiterated a Buy rating on the shares of Udemy Inc UDMY with a price target of $16.
Udemy management noted that sales cycle elongation, which initially occurred in only the SMB segment last year, has spread across the entire enterprise business, continuing all along 1Q and into 2Q, said the analyst.
But Udemy is positioned to invest once pipeline progression normalizes, opined the analyst.
While the macro has created headwinds to the buying cycle, it is also driving a reevaluation of vendors and consolidation towards single partners, the analyst added.
The company, according to the analyst, is benefiting from this trend, forming long-term strategic partnerships with customers that are grounded in a common roadmap.
International opportunities remain strong, with Japan representing UDMY’s fastest-growing country, quipped the analyst.
APAC has been an area of success, with three distinct, deeply strategic channel partnerships in Japan, South Korea, and Vietnam beginning to bear fruit.
The analyst expects UDMY to drive growth via expansion within the existing base as enterprise organizations look to consolidate content vendors.
Price Action: UDMY shares traded higher by 3.78% at $10.72 on Thursday.

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