Even After Its Disappointing Wall Street Debut, Udemy Is Worth a Look

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The Covid-19 pandemic accelerated the trend towards online education. Among the beneficiaries of this movement is Udemy (NASDAQ:UDMY), and due to a recent initial public offering (IPO), you can now trade UDMY stock.

An image of the logo for Udemy through a lens.

Source: II.studio / Shutterstock.com

Not long ago, InvestorPlace contributor Josh Enomoto put Udemy on his list of seven sharing-economy stocks to buy. Udemy might not be the most obvious choice for that list, but the company belongs in that column if you really think about it.

In a nutshell, Udemy is an online education marketplace that connects students with teachers through a range of interesting courses.

So perhaps UDMY stock could be an ideal investment now that we have a sharing economy. With that in mind, I’ll describe the stock’s brief history and estimate where it might be headed next.

A Closer Look at UDMY Stock

In case I haven’t made it clear already, Udemy hasn’t been a publicly traded company for very long. In fact, its IPO didn’t take place until Oct. 29.

Udemy priced its shares at $29 prior to the IPO, but UDMY stock’s first public trade on the Nasdaq exchange was priced at $27. As it turned out, the stock closed at $27.50 on that first day, more than 5% below its offer price.

Fast forward to Nov. 12, and neither the buyers nor the sellers seem to be in control. UDMY stock was still trading at $27 and change at that point. It’s too early in the game to identify a range for this directionless stock, unfortunately.

If you choose to pick up a few shares, an obvious price target to monitor will be $30, though $33 and $35 could also be levels of significance.

Something for Everyone

Established in 2010, Udemy was built based on co-founder Eren Bali’s vision. Bali had limited educational opportunities in rural Turkey. So Udemy was established as a place where anyone could learn anything online from any real-world expert.

As the data reveals, Udemy’s business model of facilitating self-directed learning has proven to be quite successful. According to Udemy’s prospectus, the company’s platform provides:

  • Education to over 44 million learners.
  • Access to more than 183,000 courses.
  • Course offerings in 75 languages.
  • Instruction in over 180 countries.

Moreover, since the platform’s inception, over 73 million users have registered with Udemy. Now you might have heard that Udemy’s courses are mainly focused on tech skills, such as coding.

Udemy’s educational offerings certainly cover technology topics, but its users can learn about a full range of subject areas. There’s something for practically everyone, from music to marketing, photography to business and even personal development.

Fitting a Niche

Not everyone wants or needs a college degree. Learning can be its own reward, and Udemy is successfully matching teachers with students from all walks of life. Udemy is in a high-potential niche as the company can help people from practically anywhere develop their hard and soft skills.

Plus, Udemy’s courses offer some of the essential features of traditional, university-based classes, such as quizzes, exercises, and instructor-led question-and-answer sessions. Besides, not only curious individuals are using Udemy’s learning platform.

As InvestorPlace contributor Joel Bagole pointed out, currently 8,600 organizations are utilizing the company’s offerings, and 42 of them are Fortune 100 companies. And apparently Udemy had no problem generating revenues during the onset of the Covid-19 pandemic.

From 2019 to 2020, the company’s revenues increased by 55.6% to $429.9 million. Furthermore, during the six months ending on June 30, 2021, Udemy’s revenues advanced 24.5% versus the same period a year earlier to $250.6 million.

The Bottom Line

Udemy’s IPO wasn’t an immediate, blockbuster success. That’s fine, as it’s not unusual for a stock to take some time to establish a range. Then it can break out of that range if the company is successful.

Thankfully, there’s no shortage of data showing that Udemy is a resounding success in the company’s identified niche. So don’t hesitate to give UDMY stock a try as the non-traditional, online-learning revolution is, most likely, just getting started.

On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

David Moadel has provided compelling content – and crossed the occasional line – on behalf of Motley Fool, Crush the Street, Market Realist, TalkMarkets, TipRanks, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.


Article printed from InvestorPlace Media, https://investorplace.com/2021/11/even-after-disappointing-wall-street-debut-udmy-stock-is-worth-a-look/.

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