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Should you buy or sell Udemy stock after posting mixed FQ3 results?

By:
on Dec 9, 2021
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  • Udemy shares on Thursday advanced by 2.5% after announcing its most recent quarterly results.
  • The company reported its FQ3 results Wednesday after markets closed, beating revenue expectations.
  • Its non-GAAP EPS was in line with estimates while GAAP earnings fell short of expectations.

On Thursday, Udemy Inc. (NASDAQ:UDMY) shares surged more than 2.5% after announcing its most recent quarterly results. The company reported its fiscal third-quarter results Wednesday after markets closed. Udemy outperformed analyst estimates on revenue while matching the earnings forecast.

The company posted FQ3 non-GAAP earnings per share of -$0.04 in line with expectations. On the other hand, its GAAP EPS of -$0.25 missed the consensus for analyst expectations of -$0.10, while revenue for the quarter increased by 9.4% from the same quarter a year ago to $129.6 million, exceeding the average for analyst expectations by $4.01 million.

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Udemy shares have plunged by more than 23% since going public at the end of October.

Is it safe to buy Udemy stock?

From an investment perspective, Udemy shares trade at a reasonable price-sales ratio of 6.5. Therefore, the stock could be an interesting option for value investors.

On the other hand, analysts expect its bottom line to worsen by 11% this year, thus making it less ideal to growth investors.

Source – TradingView

Technically, Udemy shares seem to be trading within a consolidative triangle formation in the hourly chart. However, the stock recently bounced off the trendline support to avoid falling into the oversold conditions of the 14-hour RSI.

Therefore, investors could target extended short-term gains at about $22.22, or higher at $24.16. On the other hand, if the post-earnings rebound ends prematurely, triggering a pullback, Udemy shares could find support at $20.16.