2U Inc (TWOU) Receives a Buy from Oppenheimer

By Austin Angelo

In a report released today, Brian Schwartz from Oppenheimer maintained a Buy rating on 2U Inc (TWOUResearch Report), with a price target of $83. The company’s shares closed yesterday at $69.81.

Schwartz observed:

“Yesterday we met 2U’s CEO and left the meeting more positive on the business momentum, growth strategy, and market positioning. We believe management has created a deep moat and defensible business powering top-tier universities’ online graduate programs and short courses. Negative cash flow and near-term margins remain overhangs for the stock, but are necessary investments to fuel long-term growth, partner expansions, and could surprise on the upside. Bottom line: We see a good opportunity for long-term investors to own a category leader (i.e, school-as-a-service) in a large TAM that’s early in an attractive secular opportunity, and ahead of an expected acceleration in the business growth over the next 12-24 months from a ramp in new program starts. Reiterate Outperform, $83 target.”

According to TipRanks.com, Schwartz is a top 25 analyst with an average return of 28.3% and a 77.0% success rate. Schwartz covers the Technology sector, focusing on stocks such as Instructure Inc, Salesforce.com, and MiX Telematics.

2U Inc has an analyst consensus of Strong Buy, with a price target consensus of $85.14, a 22.0% upside from current levels. In a report issued on February 26, BMO Capital also maintained a Buy rating on the stock with a $83 price target.

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Based on 2U Inc’s latest earnings release for the quarter ending December 31, the company reported a quarterly net profit of $4.83 million. In comparison, last year the company had a net profit of $509K.

Based on the recent corporate insider activity of 37 insiders, corporate insider sentiment is positive on the stock. This means that over the past quarter there has been an increase of insiders buying their shares of TWOU in relation to earlier this year. Most recently, in January 2019, Mark Chernis, the COO of TWOU bought 20,500 shares for a total of $12,300.

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2U, Inc. engages in the provision of cloud-based software-as-a-service solutions for nonprofit colleges and universities to deliver education to qualified students. It operates through the Graduate Program and Short Course segments. The Graduate Program segment target students seeking a full graduate degree of the same quality receives on-campus.