UDMY

Udemy ($UDMY) President Makes $74,000 Consecutive Stock Purchases After 30% Share Price Collapse, Signaling Management Confidence

05/19/2025 22:09

Udemy ($UDMY) President Hugo Sarrazin has made three consecutive stock purchases following the recent share price collapse, according to insider trading disclosures. Between May 12 and May 19, Sarrazin acquired a total of 10,600 shares at an average price of $6.99, representing an investment of approximately $74,000. This marks the only buying activity among Udemy executives this year and signals management's confidence in the company's value despite the sharp stock decline since early April. Udemy operates an online learning platform for skill acquisition and development across various sectors, including technology, business, and personal development. Founded in 2010, the company serves both individual learners and enterprise clients, with a current market capitalization of approximately $1 billion. It competes with global edtech players such as Coursera and Skillsoft. Sarrazin's purchases were executed through The Sarrazin Revocable Trust, of which he and his spouse are trustees and beneficiaries, according to the filing. His transactions were executed in multiple trades at prices ranging from $6.94 to $7.00. Recently, Udemy appointed Neeracha Taychakhoonavudh as its first Chief Customer Experience Officer to accelerate its enterprise strategy, reflecting a strategic shift toward focusing more on corporate clients rather than individual learners. The company has also launched the Udemy Innovation Studio, aiming to transform into an AI-powered reskilling platform. The edtech industry is undergoing significant transformations with AI integration and transitions to hybrid learning environments, and Udemy is working to adapt to these trends. In its Q1 2025 financial results, Udemy exceeded expectations with adjusted earnings of 12 cents per share, surpassing both last year's 3 cents and analysts' projections of 10 cents. Revenue increased by 1.8% to $200.30 million, above the expected $197.13 million. Notably, the Enterprise segment posted 9% growth to $127.7 million, while the Consumer segment declined by 8% to $72.6 million. The company's adjusted EBITDA was approximately $21 million, representing an 11% margin and impressive 227% year-over-year growth. Net loss significantly improved from $18.3 million in the prior year to $1.8 million. However, prior to Sarrazin's recent buying spree, selling had dominated insider transactions at the company. The most notable transaction was major shareholder Naspers Ltd's sale of 3.2 million shares (worth approximately $25 million) on January 21, 2025. These shares were held through MIH Edtech Investments B.V., a subsidiary of Prosus N.V., which is beneficially owned by Naspers. Additionally, CTO Eren Bali sold approximately 69,500 shares in February and another 10,000 shares in March, while former President Gregory Scott Brown and CFO Sarah Blanchard also conducted significant sales in late 2024. Udemy's stock has experienced significant volatility this year. Following better-than-expected Q4 results on February 14, 2025, shares surged 31% to reach $10.22. However, the stock subsequently turned downward, falling to as low as $6.04 in early April. As of mid-May when Sarrazin made his purchases, the stock had stabilized around $7, approximately 30% below its 52-week high of $10.10. In the short term, recent earnings improvements, continued growth in the enterprise segment, and insider buying by management may serve as positive signals. Udemy is projecting Q2 2025 revenue between $195 million and $199 million and adjusted EBITDA between $22 million and $24 million. The company has set full-year revenue guidance at $772 million to $794 million. Longer term, AI integration and strengthening its position in the corporate education market should drive growth. The 8% year-over-year increase in Annual Recurring Revenue (ARR) for Udemy Business to $519 million is a particularly encouraging sign. The President's recent stock purchases may reflect management's belief that the current share price undervalues the company. With its enterprise/institutional customer base growing to over 17,200 and its focus on AI-driven innovation, this insider buying provides investors with a signal of confidence in the company's long-term outlook. However, investors should remain cautious given the major shareholder's large divestiture, intensifying competition, and declining consumer segment revenue, and should closely monitor upcoming earnings reports and the success of strategic initiatives.

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