UPDATE: Citi Assumes Udemy Inc (UDMY) at Buy

Citi analyst Thomas A Singlehurst assumes coverage on Udemy Inc (NASDAQ: UDMY) with a Buy rating and a price target of $32.00.

The analyst commen6ts "We rate Udemy as a Buy. We are bullish on Udemy for the following reasons – Large and rapidly growing TAM - against the total $360Bn market, given its focus on content and the learning platform, the relevant TAM for Udemy is $28Bn. Within this about a third of the elearning spend is currently outsourced by corporates to external providers such as Udemy, i.e. at $9Bn but growing at 18%. Differentiated approach to content creation - Udemy’s open marketplace content creation model places no entry barriers on instructor onboarding. This drives a virtuous circle and the net result of all this is that Udemy is able to generate content at a significantly faster pace than its peers. Udemy Business underpins revenue growth visibility and path to break-even - We forecast Group revenue to grow at a c.23% CAGR until FY25 with the contribution from Udemy Business increasing to 64% in FY25 vs. 35% in FY21. The mix shift from consumer to business should be accretive to gross margins given the lower instructor take rates at business (25%) vs. consumer (c.40%). We estimate group gross margins will increase to 61% by FY25 vs. 55% in FY21. On the back of this we estimate adj. EBITDA breakeven by FY26."

For an analyst ratings summary and ratings history on Udemy Inc click here. For more ratings news on Udemy Inc click here.

Shares of Udemy Inc closed at $10.13 yesterday.

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