May 16, 2024
Top 10 Stock Udemy Strong Buy Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Udemy – Top 10 Stock in SDG 10: Reduced Inequality
Udemy is listed as a top 10 stock on May 16, 2024 in the market index SDG 10 because of its high performance in at least one of the Obermatt investment strategies. Three consolidated Obermatt Ranks are above-average. Only the Value Rank is below average. The investment rationale may be an investment in future growth, supported by professional market opinion. Based on the Obermatt 360° View of 95 (top 95% performer), Obermatt assesses an overall strong buy recommendation for Udemy on May 16, 2024.
Snapshot: Obermatt Ranks
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Udemy Strong Buy
| 360 METRICS | May 16, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 32 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 81 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 92 |
|
||||||
| SENTIMENT | ||||||||
| SENTIMENT | 84 |
|
||||||
| 360° VIEW | ||||||||
| 360° VIEW | 95 |
|
||||||
ANALYSIS: With an Obermatt 360° View of 95 (better than 95% compared with alternatives) for 2024, overall professional sentiment and financial characteristics for the stock Udemy are very positive. The 360° View is based on consolidating four consolidated indicators, with all but one indicator above average for Udemy. The consolidated Growth Rank has a good rank of 81, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth, as well as stock returns. This means that growth is higher than for 81% of competitors in the same industry. The consolidated Safety Rank at 92 means that the company has a financing structure that is safer than 92% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. Finally, the consolidated Sentiment Rank has a good rank of 84, which means that professional investors are more optimistic about the stock than for 84% of alternative investment opportunities. But the consolidated Value Rank is less desirable at 32, meaning that the share price of Udemy is on the higher side compared with indicators such as revenues, profits, and invested capital. This means the stock price is higher than for 68% of alternative stocks in the same industry. ...read more
RECOMMENDATION: With a consolidated 360° View of 95, Udemy is better positioned than 95% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as above-average growth (Growth Rank of 81), a safe financing structure (Safety Rank of 92), and positive professional market sentiment (Sentiment Rank of 84), it is a solid stock investment where growth may be the strongest driver of the investment rationale, also reflected by institutional investors. It is typical for growth companies to have low value, as is the case here. Investors are willing to pay more for companies that outperform their competitors. So the question is, how much more do you pay for the stock of Udemy compared with alternatives? You can use the following rule of thumb: The growth rank measures the growth momentum of the company (81% better than peers). The value rank could be the reverse reflection of that (19%). A Value Rank below that level may be assessed as expensive, a rank above that is still good value. Sometimes market sentiment just reflects the past, sometimes the reality. You pay more than the market average for this stock, but it may be worth it. ...read more
Sentiment Strategy: Professional Market Sentiment for Udemy very positive
ANALYSIS: With an Obermatt Sentiment Rank of 84 (better than 84% compared with alternatives) for 2024, overall professional sentiment and engagement for the stock Udemy is very positive. The Sentiment Rank is based on consolidating four sentiment indicators, with all but one indicator above average for Udemy. Analyst Opinions are at a rank of 89 (better than 89% of alternative investments), which means that currently, stock research analysts tend to recommend a stock investment in the company. In addition, Analyst Opinions Change has a rank of 98, which means that currently, stock research experts are getting even more optimistic. Obermatt Market Pulse further supports this with a rank of 83, which means that the current professional news and professional social networks are generally positive when discussing this company (more positive news than for 83% of competitors). But there are few stock holdings by institutional investors. The Professional Investors rank is low at 10, which means that currently, professional investors hold less stock in this company than in 90% of alternative investment opportunities. Pros tend to invest in other companies. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 84 (more positive than 84% compared with investment alternatives), Udemy has a reputation among professional investors that is significantly higher than that of its competitors. Not having too many professionals invested in Udemy may be less of an issue, especially if the stock is from a smaller company where professionals typically invest less. It is natural for professional investors to focus on large and extra-large companies, as they provide more safety. Smaller companies attract fewer professionals in the shareholder community. Overall, the signals from the professionals are still quite favorable for investments in Udemy. ...read more
Value Strategy: Udemy Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 32 (worse than 68% compared with alternatives), Udemy shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, where the majority of metrics are below, and only one is above average for Udemy. Price-to-Sales (P/S) is 69, which means that the stock price compared with what market professionals expect for future sales is lower than 69% of comparable companies, indicating a good value concerning to Udemy's revenue size. But all other performance indicators point in a different direction. Dividend yields have a Dividend Yield rank of 1, meaning that dividends are expected to be lower than for 99% of comparable investments. Furthermore, Price-to-Book Capital (also referred to as market-to-book ratio) is less favorable than 55% of alternatives (only 45% of peers have an even higher ratio). The same is valid for Price-to-Profit (or Price / Earnings, P/E), which is higher than for 89% of comparable companies, making the stock more expensive compared with the company's expected profit levels. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 32, is a hold recommendation based on Udemy's stock price compared with the company's operational size and dividend yields. Since Price-to-Sales is a stable value indicator even in challenging times, investing in Udemy could be seen as a value investment. However, there must be a good reason for the low market-to-book rank. If the company has a typical capital investment practice, the stock may be overvalued because the profit and dividend-related performance indicators are also low. The stock is only good value if investors can expect profits and dividends to pick up in the future. Else, Udemy looks like an expensive investment today. ...read more
Growth Strategy: Udemy Growth Momentum high
ANALYSIS: With an Obermatt Growth Rank of 81 (better than 81% compared with alternatives) for 2024, Udemy shows one of the highest growth dynamics in its industry. Investors also speak of high momentum. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for Udemy. Sales Growth has a value of 60 which means that currently professionals expect the company to grow more than 60% of its competitors. Profit Growth with a value of 98 and Capital Growth with a rank of 81 means that currently, professionals expect the company to grow both profits and invested capital more than of its competitors. But Stock Returns has only a rank of 41, which means that stock returns have recently been below 59% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 81, is a buy recommendation for growth and momentum investors. Udemy has only one below-average growth indicator, the stock returns. This is probably the least reliable growth indicator, because it measures company and investor expectations at the same time. The three other growth indicators, which are all positive for Udemy, are more reliable measures of growth momentum. For this reason, the company seems to be on a good trajectory, unless you think the current period is not representative, because of unique events that will not be repeated in the future. ...read more
Safety Strategy: Udemy Debt Financing Safety very solid
| SAFETY METRICS | May 16, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| LEVERAGE | ||||||||
| LEVERAGE | 100 |
|
||||||
| REFINANCING | ||||||||
| REFINANCING | 67 |
|
||||||
| LIQUIDITY | ||||||||
| LIQUIDITY | 10 |
|
||||||
| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 92 |
|
||||||
ANALYSIS: With an Obermatt Safety Rank of 92 (better than 92% compared with alternatives) for 2024, the company Udemy has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Udemy is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators where two out of three are above average for Udemy.Leverage is at 100, meaning the company has a below-average debt-to-equity ratio. It has less debt than 100% of its competitors.Refinancing is at a rank of 67, meaning that the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 67% of its competitors. Liquidity is at 10, meaning that the company generates less profit to service its debt than 90% of its competitors. This indicates that the company is on the riskier side regarding debt service. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 92 (better than 92% compared with alternatives), Udemy has a financing structure that is significantly safer than that of its competitors. Low leverage and low refinancing risk mean a safer financing situation. However, low liquidity means that current company cash flows are low in relation to the level of debt. This is a sign of caution in case it is expected for profits to remain low. ...read more
Combined financial peformance: Udemy Top Financial Performance
| COMBINED PERFORMANCE | May 16, 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| VALUE | ||||||||
| VALUE | 32 |
|
||||||
| GROWTH | ||||||||
| GROWTH | 81 |
|
||||||
| SAFETY | ||||||||
| SAFETY | 10 |
|
||||||
| COMBINED | ||||||||
| COMBINED | 95 |
|
||||||
ANALYSIS: With an Obermatt Combined Rank of 95 (better than 95% compared with investment alternatives), Udemy (Education Services, USA) shares have much better financial characteristics than comparable stocks. Shares of Udemy are low in value (priced high) with a consolidated Value Rank of 32 (worse than 68% of alternatives). But they show above-average growth (Growth Rank of 81) and are safely financed (Safety Rank of 92, which means below-average debt burdens). ...read more
RECOMMENDATION: A Combined Rank of 95, is a strong buy recommendation based on Udemy's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Udemy exhibits low value (Obermatt Value Rank of 32), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 81). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 92) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). ...read more
Obermatt Portfolio Performance
We’re so convinced about our research, that we buy our stock tips.
See the performance of the Obermatt portfolio.