Udemy's Merger Timeline Could Eclipse Whatever the Numbers Show

Udemy Inc (UDMY) reports first-quarter 2026 earnings tomorrow, May 13, with Wall Street expecting the online learning platform to post a loss of $0.02 per share. The release comes as the stock trades at $4.63, well below all major moving averages and down sharply from its 52-week high of $8.09. Investors will be watching closely to see if the company can extend its four-quarter streak of earnings beats while navigating a challenging environment for consumer-facing education technology.

Part 1: Earnings Preview

Udemy operates a leading online learning marketplace connecting learners and instructors across technology, business, personal development, and creative subjects, while also providing enterprise learning solutions through Udemy for Business. The company serves learners in over 190 countries and completed its IPO in October 2021.

Udemy is scheduled to report Q1 2026 results on May 13, with analysts expecting a loss of $0.02 per share on revenue of approximately $196.30 million. The company most recently reported Q4 2025 earnings of $0.02 per share, beating estimates by $0.04. Comparing to the same quarter last year, the current consensus represents a significant deterioration—analysts had expected a loss of $0.04 per share in Q1 2025, but the company delivered breakeven results.

Three key themes define this earnings story:

AI-Powered Learning Evolution: Udemy recently expanded its AI Role Play capabilities to advance immersive, skills-based learning, positioning the platform to compete more effectively in the rapidly evolving corporate training market. Investors will watch for commentary on how AI features are driving engagement and whether they're translating into improved monetization, particularly within the enterprise segment.

Enterprise Growth Trajectory: With the consumer education market facing headwinds, Udemy for Business has become increasingly critical to the company's growth narrative. Wall Street will scrutinize enterprise customer additions, retention rates, and average contract values to assess whether the B2B segment can offset weakness in the consumer marketplace.

Competitive Positioning Amid Consolidation: Recent reports of a potential Coursera-Udemy merger have put the spotlight on competitive dynamics in online education. Analysts will listen for management's perspective on market consolidation, competitive threats, and whether Udemy can maintain its marketplace model advantage as larger players pursue scale through M&A.

Analyst commentary ahead of the release reflects cautious optimism tempered by valuation concerns. While the company has consistently beaten estimates over the past four quarters, full-year 2026 EPS expectations have been revised downward from $0.07 to -$0.01, suggesting analysts see near-term profitability challenges despite the operational improvements.

Part 2: Historical Earnings Performance

Udemy has established a strong pattern of exceeding Wall Street expectations, beating consensus estimates in each of the past four quarters. The magnitude of these beats has been substantial, ranging from +100% in Q1 2025 to +300% in Q2 2025, with an average surprise of approximately +183% across the four-quarter period.

The trend shows consistent operational outperformance, with the company posting positive earnings in three of the past four quarters despite analysts expecting losses in each period. Q1 2025 delivered breakeven results against a -$0.04 estimate, Q2 2025 posted $0.04 versus -$0.02 expected, Q3 2025 came in at $0.01 against -$0.03 consensus, and Q4 2025 reported $0.02 versus -$0.02 estimated.

This pattern suggests either persistent analyst conservatism or genuine operational improvements that have yet to be fully reflected in forward estimates. The consistency of beats across multiple quarters indicates structural improvements in the business rather than one-time factors, though the downward revision in full-year 2026 estimates suggests analysts remain cautious about sustainability.

Note: These figures reflect diluted GAAP earnings per share, reported before non-recurring items, and may differ from the non-GAAP figures used by some sources.

Part 2.1: Price Behavior Around Earnings

Udemy typically reports earnings after market close, meaning Day 0 reflects anticipatory trading before results are released, while Day +1 captures the market's first full reaction to the actual numbers.

Historical price action around Udemy earnings shows significant volatility, with an average absolute Day 0 move of 2.32% and Day +1 move of 9.96%. The Day +1 reaction has been particularly dramatic, ranging from a -18.61% decline following the July 2024 miss to a +28.01% surge after the February 2025 report.

The most notable pattern is the outsized Day +1 moves relative to Day 0, with the average Day +1 range of 14.77% more than three times the Day 0 range of 4.43%. This suggests the market typically waits for the full earnings details and management commentary before making major positioning decisions. Recent quarters show this volatility persisting—the October 2025 report saw an 11.76% Day +1 decline despite a modest 6.86% Day 0 drop, while July 2025 delivered an 8.87% Day +1 gain after minimal Day 0 movement.

Investors should prepare for substantial post-earnings price swings, particularly in the session following the release, with double-digit percentage moves being the norm rather than the exception.

Part 2.2: Options Market Expected Move

The options market is pricing in a 3.12% expected move through the May 15 expiration, significantly below the stock's average historical Day +1 move of 9.96% and well under the average Day +1 range of 14.77%. This suggests options traders are either underpricing earnings volatility or expecting a more muted reaction than the stock has historically delivered, potentially creating opportunities for volatility-focused strategies.

Part 3: What Analysts Are Saying

Analysts maintain a cautious stance on Udemy, with a consensus rating of 3.43 (between Hold and Buy) and an average price target of $8.00. The current rating breakdown shows 1 Strong Buy, 1 Moderate Buy, 5 Holds, and no sell ratings among the 7 analysts covering the stock.

The average price target of $8.00 implies 73% upside from the current price of $4.63, with estimates ranging from a low of $6.00 (+30% upside) to a high of $10.00 (+116% upside). This wide range reflects significant disagreement about the company's valuation and growth prospects.

Analyst sentiment has remained unchanged over the past month, with the rating distribution and average recommendation holding steady at 3.43. This stability suggests analysts are taking a wait-and-see approach ahead of earnings rather than making significant revisions to their outlooks. The concentration of ratings in the Hold category (5 of 7 analysts) indicates most of Wall Street views the risk-reward as balanced at current levels, despite the substantial implied upside to the consensus target.

Part 4: Technical Picture

The Barchart Technical Opinion shows a Sell signal at 80%, strengthening from 56% a week ago and easing slightly from 100% a month ago. This deteriorating technical picture reflects the stock's persistent weakness as it trades below all key moving averages.

Timeframe Analysis:

• Short-term (50% Sell): Moderate sell signal indicates near-term momentum remains negative but less severe than longer timeframes
• Medium-term (100% Sell): Strong sell signal suggests consolidation has failed and the intermediate trend is firmly bearish
• Long-term (100% Sell): Strong sell signal reflects significant weakness in the longer-term trend structure

Trend Characteristics: The technical environment shows Average strength with a Strengthening direction, indicating the bearish trend is gaining momentum heading into the earnings release.

The stock's position below all major moving averages paints a challenging technical picture. UDMY trades below its 5-day MA of $4.77, 10-day MA of $4.82, 20-day MA of $4.84, 50-day MA of $4.77, 100-day MA of $5.00, and 200-day MA of $5.70. The 200-day moving average at $5.70 represents the most significant overhead resistance level, sitting 23% above the current price. With the stock near its 52-week low of $4.02 and technical indicators uniformly bearish, the setup heading into earnings is cautionary—any disappointment could push UDMY toward new lows, while a strong beat would need to be substantial to overcome the negative technical momentum and trigger a meaningful reversal.