Canaccord Genuity has reduced its 12-month price target for Udemy Inc. to $5.00 from $7.00 while retaining a Hold rating on the stock. Shares of Udemy are trading near recent lows, quoted at $4.78 and sitting just above a 52-week low of $4.52. Over the last six months the share price has fallen by about 38%.
Udemy reported fourth-quarter results that modestly outperformed expectations for both top-line revenue and profitability. The company achieved a notable gross profit margin of 65.63% in the quarter. Subscription revenue continued to dominate the revenue mix, accounting for more than three-quarters of total revenue during the period, consistent with managements push toward a subscription-first model.
Management highlighted advances in the enterprise segment as Udemy shifts upmarket. The company pointed to AI-related content and new offerings, including custom role play simulation products, as tools that helped corporate customers create more personalized learning experiences.
Udemy did not host an earnings call nor provide forward guidance for the upcoming period. Management cited the pending all-stock transaction with Coursera as the reason for withholding guidance; the merger was announced in December and is reported to remain on track to close in the second half of 2026.
Canaccord Genuity noted the potential operational and margin benefits of combining Udemys enterprise capabilities with Courseras consumer learning business. The brokerage suggested the merged company could potentially reach an adjusted EBITDA margin near 20% while addressing rising demand for reskilling driven by technological changes such as artificial intelligence.
The merger terms specify that Coursera shareholders are expected to own 59% of the combined company, while Udemy shareholders would hold 41%. The agreement also includes a 26% premium for Udemy shareholders, calculated based on the average closing prices of both companies over the 30 trading days prior to the announcement.
In connection with the merger, Udemy disclosed an acceleration agreement with CEO Hugo Sarrazin intended to limit potential tax exposure related to the transaction. The agreement provides for an early payout of his 2025 target annual bonus and the immediate vesting of certain restricted stock units.
Separately, Udemy has forged a partnership with LG CNS aimed at expanding its presence in Koreas corporate learning market. That collaboration gives Udemy access to more than 500 enterprise clients through LG CNSs corporate relationships.
Looking ahead, Udemy is planning to introduce an AI-powered microlearning experience in 2026. The initiative is intended to convert instructor-created video courses into shorter, adaptive modules optimized for both mobile and desktop delivery, reflecting the companys focus on bite-sized, personalized learning formats.
Market responses to the merger have already surfaced in analyst coverage. Following the transaction announcement, KeyBanc Capital Markets downgraded Udemys rating from Overweight to Sector Weight.