Udemy, Inc.: Initiation of Research Coverage

Tuesday, November 23, 2021

William Blair initiated research coverage of Udemy, Inc. (UDMY $30.97), an open-source learning content provider for both individual learners and businesses.

Analysts Stephen Sheldon and Ralph Schackart estimated that the company would generate revenue of $507 million in 2021 and $618 million in 2022.

“Udemy is one of the largest learning providers, and its open-source content is created entirely by independent instructors (often practitioners) who are incentivized to create engaging content through revenue-sharing arrangements,” Sheldon said. “This structure has allowed Udemy to create a broad learning content library with over 180,000 courses (average of 5,000 added monthly) spanning subjects like IT, business/soft skills, and personal enrichment. In addition to Udemy’s breadth of courses, content optimization is driven by learner-instructor engagement, providing for a quality, cost-efficient offering.”

Schackart added, “Udemy pegs its target learning market at over $220 billion (two-thirds individual learners and one-third businesses). We believe this will support multiple providers, especially given secular growth tailwinds, with Udemy well positioned to scale considerably. Market drivers include the need for high-quality continuous learning options, hiring challenges that may force companies to focus on upskilling existing employee pools, broader adoption of online learning such as corporate training (historically heavily classroom-based), and personalization in learning pathways.”

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Current Ratings Distribution (as of 11/22/21)

Coverage Universe
Outperform (Buy): 76%
Market Perform (Hold): 24%
Underperform (Sell): 1%

Inv. Banking Relationships*
Outperform (Buy): 32%
Market Perform (Hold): 12%
Underperform (Sell): 0%

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