Duolingo shares hit their lowest price since 2023. Is the sell-off overdone?Shares of Duolingo (DUOL 8.83%) plunged 23.6% lower in January 2026, according to data from S&P Global Market Intelligence. The price drop continued a downtrend that started in 2025. The stock has backed down to prices not seen since March 2023, chiefly due to slower subscriber growth in a shaky global economy.January continued the downtrend for similar reasons. The market pressure also increased when CFO Matt Skaruppa announced his ...

Core Insights - Skillsoft Corp. (SKIL) is transitioning to an AI-native platform, which is becoming essential for the company's growth strategy and market approach [1][8] - The CEO has compared Skillsoft's AI-driven model to that of Netflix, indicating strong management confidence in this strategic pivot [2] - AI integration has led to a 2.4% year-over-year reduction in content and software development expenses due to increased productivity [3][8] Financial Performance - SKIL's revenues decreased by 6% year-over-year to $129 million in Q3 of fiscal 2026, primarily due to an 18% decline in the Global Knowledge segment [4] - The Talent Development Solutions segment shows potential for growth despite overall revenue challenges [4] AI Integration and Strategy - Over 50% of content design, curation, and production utilized AI in Q3 of fiscal 2026, demonstrating the company's commitment to AI in its operations [2][8] - The integration of AI and CAISY into the next-generation Skillsoft Percipio aims to enhance learning experiences and support enterprise contracts [5][8] Market Position and Valuation - Skillsoft's stock has decreased by 73% over the past year, contrasting with a 19.4% growth in the industry [6] - The company trades at a forward price-to-sales ratio of 0.14, significantly lower than peers VerifyMe (1.04) and Agora (2.94) [10] - Skillsoft holds a Value Score of A, while its peers have lower scores, indicating a favorable valuation perspective [13]

Core Viewpoint - Equasens has acquired an 80% controlling interest in Erevo, a leading e-learning provider for healthcare professionals, to enhance its digital training strategy and expand its service offerings in the healthcare sector [2][4][6]. Company Overview - Equasens is a prominent provider of digital solutions for healthcare professionals, employing over 1,400 people across Europe and focusing on software, hardware, financing, and data-hosting solutions [14]. - Erevo, founded in 2018, specializes in online education for healthcare professionals, offering over 80 e-learning courses and serving a community of more than 20,000 trained learners [3][11]. Acquisition Details - The acquisition of Erevo is expected to generate revenue of €7.4 million in 2025, aligning with Equasens' profitable growth strategy [4]. - The transaction was funded through bank financing and includes a call option on the remaining 20% stake, with the option value linked to Erevo's future performance [9]. Strategic Synergies - The acquisition is anticipated to create significant operational, marketing, and sales synergies between Equasens' existing training offerings and Erevo's programs [7]. - Erevo's innovative training model, which includes virtual classrooms and a comprehensive support system, complements Equasens' existing services and enhances its digital training portfolio [5][6]. Market Positioning - Erevo is recognized for its high-quality training programs, which are eligible for funding under French professional education schemes, making it a leading provider in the continuing education market for healthcare professionals [5][11]. - The acquisition aligns with Equasens' strategy to support healthcare professionals in both primary care and hospital settings, thereby broadening its market reach [6][8].

Core Viewpoint - Rowley Law PLLC is investigating potential securities law violations by Udemy, Inc. related to its proposed acquisition by Coursera, Inc. [1] Group 1: Acquisition Details - Udemy stockholders will receive 0.800 shares of Coursera common stock for each share of Udemy stock they hold [1] - After the acquisition, Udemy stockholders will own approximately 41% of the combined company [1] - The transaction is expected to close by the second half of 2026 [1] Group 2: Legal Investigation - Rowley Law PLLC is representing shareholders in the investigation concerning the acquisition [1] - The firm specializes in class actions and derivative lawsuits in complex corporate litigation [3]

Core Viewpoint - Skillsoft Corp. (SKIL) has experienced significant selling pressure, resulting in a 37.1% decline in stock price over the past four weeks, but analysts anticipate improved earnings in the near future [1] Group 1: Technical Analysis - The Relative Strength Index (RSI) is utilized to determine if SKIL is oversold, with a current reading of 27.72 indicating potential for a price reversal [2][5] - Stocks oscillate between overbought and oversold conditions, and the RSI helps identify when a stock may be undervalued due to excessive selling [3] Group 2: Fundamental Analysis - Analysts have raised earnings estimates for SKIL by 70.8% over the last 30 days, suggesting a positive outlook for the company's earnings [7] - SKIL holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks, indicating strong potential for a turnaround [8]

Core Insights - Udemy has announced a partnership with LG CNS to expand into Korea's corporate learning market [1] - The partnership will leverage LG CNS's distribution network, which includes over 500 enterprise clients and millions of professionals [1] - Udemy will provide its AI-powered platform, including features like MCP Server, AI Assistant, and Role Play [1] Company Overview - Udemy is positioned as a global AI-powered skills acceleration platform [1] - The collaboration with LG CNS marks a strategic move to enhance Udemy's presence in the Asian market [1] Market Impact - The partnership is expected to significantly increase Udemy's reach within the corporate learning sector in Korea [1] - Access to LG CNS's extensive client base may lead to increased adoption of Udemy's learning solutions [1]

Core Insights - Udemy has announced the phased rollout of a new AI-powered microlearning experience aimed at transforming skill development on its platform, catering to the evolving needs of learners and instructors [1][4]. Group 1: AI-Powered Microlearning Experience - The new microlearning approach will convert long-form video courses into adaptive, engaging, and interactive experiences optimized for both mobile and desktop learning [2][3]. - Instructors will utilize a "human-in-the-loop" method to review and validate microlearning content, ensuring quality before it reaches learners [3][4]. - The rollout of these instructor-validated microlearning experiences is scheduled to occur throughout 2026, accessible via Udemy.com, the mobile app, and enterprise learning environments [3][4]. Group 2: Instructor Engagement and Role - Instructors are viewed as central to the skill development process, acting as creative directors who curate and validate learning experiences [4][7]. - The AI-powered microlearning model emphasizes the importance of human insights and lived experiences in teaching, reinforcing Udemy's commitment to its instructor community [4][7]. - Opportunities for both existing and new instructors specializing in short-form, interactive learning experiences will be expanded [7]. Group 3: Market Position and Clientele - Udemy serves thousands of companies, including notable clients such as Ericsson, Samsung SDS America, and Volkswagen, providing enterprise solutions to build agile teams [8]. - The platform combines on-demand, multi-language content with real-time innovation to deliver personalized learning experiences [6].

Core Insights - Skillsoft Corp. reported an earnings per share (EPS) of $1.65, exceeding the estimated $1.26, and showing a significant improvement from the previous year's loss of $1.82 per share [1][6] - The company has consistently surpassed consensus EPS estimates over the past four quarters, indicating strong performance [2][6] Financial Performance - The earnings surprise for the latest quarter was +30.95%, and the previous quarter saw a remarkable surprise of +143.81% with earnings of $0.92 against an expected loss of $2.1 per share [2] - Revenue for the quarter was $129 million, slightly below the estimated $131.6 million, representing a 6% decrease from the previous year's revenue of $137.23 million [3] - Revenue from Talent Development Solutions (TDS) was $101 million, reflecting a 2% decline from the prior year [3] - The company has surpassed consensus revenue estimates twice in the last four quarters [3][6] Valuation Metrics - The price-to-sales ratio is 0.13, indicating that the stock may be undervalued compared to sales [4] - The enterprise value to operating cash flow ratio is high at 46.16, suggesting potential overvaluation based on cash flow [4] Leverage and Liquidity - The debt-to-equity ratio is high at 144.58, indicating significant leverage [5] - The current ratio is 0.84, which is below the standard threshold of 1, suggesting potential liquidity concerns [5] - Despite these challenges, the company's consistent earnings surprises highlight its potential for future growth [5]

Financial Data and Key Metrics Changes - Total revenue for the third quarter was $129 million, down $8.2 million or 6% year-over-year [13] - Adjusted EBITDA was $28 million, down about 12% compared to $31.9 million last year, with an adjusted EBITDA margin of 21.7% compared to 23.3% last year [15] - GAAP net loss was $41.3 million, compared to a GAAP net loss of $23.6 million in the prior year period, primarily due to a non-cash goodwill impairment loss of $20.8 million related to the GK segment [16] - Free cash flow for the quarter was -$23.6 million, compared to a positive $4.1 million in the prior year period [17] Business Line Data and Key Metrics Changes - Revenue for Talent Development Solutions (TDS) was $100.8 million, down 2.1% year-over-year, with around 70% of the decline coming from the B2C learner product [12] - Global Knowledge (GK) revenue was $28.2 million, down approximately $6 million or 17.6% year-over-year, impacted by a shift in customer purchasing preferences and spending reductions from the U.S. government shutdown [13][14] - TDS dollar retention rate (DRR) improved to 99% from 98% year-over-year, while GK accounted for 73% of the revenue decline despite representing only 22% of total revenue [14][9] Market Data and Key Metrics Changes - The public sector business showed signs of recovery post-government shutdown, with DRR related to federal business around 103-104, indicating stabilization [34] - The company is focusing on large enterprise customers who have shown deeper adoption of advanced features, achieving a 115% dollar retention rate in Q3 [7][36] Company Strategy and Development Direction - The company is transforming its strategy to focus on the talent development market, aiming for revenue inflection and growth while maintaining strong profitability and cash flow [5] - A strategic review of the GK segment is underway, with a shift towards a partnership-driven model rather than continued ownership [9][20] - The company is investing in AI capabilities to enhance its platform, aiming to capture opportunities in the evolving skills management market [6][45] Management's Comments on Operating Environment and Future Outlook - Management highlighted the urgency of improving cash flow and the importance of aligning with customer needs for multimodal learning [23][24] - The company is optimistic about future growth, with plans to roll out new branding and a revamped sales model in FY 2027 [29][55] - Management emphasized the importance of AI in redefining content and platform offerings, positioning the company well for future growth [45][46] Other Important Information - The company expects positive free cash flow of between $0 and $5 million for fiscal 2026, with guidance for TDS revenue for the full fiscal year projected between $400 million and $410 million [21][18] - Total gross debt was $578 million at the end of Q3, down slightly from the previous year, while total net debt increased to approximately $500 million [19][20] Q&A Session Summary Question: Timeline for strategic review of GK segment - Management indicated that it is inappropriate to speculate on the exact timing but emphasized the urgency of improving cash flow [23] Question: Margin profile of core TDS and growth potential - Management noted that TDS has strong profitability and will focus on maintaining profitability while investing for growth [25][27] Question: Stability of public sector business post-shutdown - Management reported positive signs of recovery in the public sector business, with healthy performance expected to continue into Q4 [34] Question: Sales cycles and deal momentum in Q4 - Management stated that sales cycles are within normal boundaries and highlighted the positive performance of larger customers [35][36] Question: Approach to investment cadence moving forward - Management plans to continue driving productivity improvements and will shift focus to growth investments as the TDS model proves successful [50]

Financial Data and Key Metrics Changes - Total revenue for the third quarter was $129 million, down $8.2 million or 6% year over year [15] - Adjusted EBITDA was $28 million, down about 12% compared to $31.9 million last year, with an adjusted EBITDA margin of 21.7% compared to 23.3% last year [17] - GAAP net loss was $41.3 million, compared to a GAAP net loss of $23.6 million in the prior year period, primarily due to a non-cash Goodwill Impairment loss of $20.8 million related to GK [18] - Free Cash Flow for the quarter was negative $23.6 million, compared to a positive $4.1 million in the prior year period [19] Business Line Data and Key Metrics Changes - Revenue for Talent Development Solutions (TDS) was $100.8 million, down 2.1% year over year, with around 70% of the decline coming from the B2C learner product [14] - Global Knowledge (GK) revenue was $28.2 million, down approximately $6 million or 17.6% year over year, impacted by a shift in customer purchasing preferences and spending reductions from the U.S. government shutdown [15][16] - TDS's dollar retention rate (DRR) improved to 99% from 98% year over year, while GK accounted for 73% of the revenue decline despite representing only 22% of total revenue [16][10] Market Data and Key Metrics Changes - The enterprise portion of TDS, which represents around 91% of TDS, was down slightly due to customer churn from earlier in the year [12] - The public sector business showed signs of recovery with a DRR of around 103-104, indicating stabilization after the government shutdown [36] Company Strategy and Development Direction - The company is focusing on the talent development market, aiming to reach revenue inflection and return to growth while maintaining strong profitability and cash flow [5] - A strategic review of the GK segment has been initiated, with a shift towards a partnership-driven model rather than continued ownership [10] - The company is investing in AI-driven skills management solutions, anticipating a market shift towards AI-powered skills solutions [7][11] Management's Comments on Operating Environment and Future Outlook - Management highlighted the importance of skills visibility as a top investment priority for organizations, with over 70% of CHROs citing it as critical [5] - The company is optimistic about its positioning for growth in FY27, with a focus on product innovation and a leaner cost structure [8][9] - Management acknowledged the challenges faced in the GK segment but expressed confidence in the overall transformation and future growth potential [11][22] Other Important Information - The company expects full fiscal 2026 year revenue for TDS to be between $400-$410 million and adjusted EBITDA of between $112-$116 million [22] - GAAP cash, cash equivalents, and restricted cash were $77.5 million at quarter end, with total gross debt at $578 million [20][21] Q&A Session Summary Question: What is the timeline for the strategic review of GK? - Management indicated that it is inappropriate to speculate on the exact timing but emphasized the urgency to improve cash flow for the company overall [24] Question: How does GK's underperformance affect TDS margins? - Management noted that TDS is currently the flagship for growth and profitability, and they are focused on maintaining profitability while investing in growth [26][29] Question: How is the public sector business shaping up post-government shutdown? - Management reported that the public sector business is stabilizing, with positive signs in the federal business and a healthy DRR [36] Question: What is the approach to investment cadence moving forward? - Management stated that they will continue to drive productivity improvements and shift economic benefits into growth investments as they prove their model [52][53]