Ready to Jump After Recent Trade: 2U Inc. (TWOU)

2U Inc. (NASDAQ: TWOU) stock jumped 4.80% on Friday to $6.66 against a previous-day closing price of $6.35. With 1.98 million shares changed hands, the volume of the stock remained heavier than its average volume of 0.97 million shares. During the session, the Education & Training Services company that operates in wider Consumer Defensive sector, reached to the highest price of $6.80 whereas the lowest price it dropped to was $6.20. The 52-week range on TWOU shows that it touched its highest point at $18.24 and its lowest point at $4.70 during that stretch. It currently has a 1-year price target of $10.29. Beta for the stock currently stands at 1.09.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of TWOU was down-trending over the past week, with a drop of -8.59%, but this was down by -0.22% over a month. Three-month performance surged to 26.28% while six-month performance fell -41.42%. The stock lost -56.84% in the past year, while it has gained 6.14% so far this year. A look at the trailing 12-month EPS for TWOU yields -4.92 with Next year EPS estimates of 0.20. For the next quarter, that number is 0.21. This implies an EPS growth rate of 19.00% for this year and 215.80% for next year. EPS is expected to grow by 20.00% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of -42.50%.

Float and Shares Shorts:

At present, 77.69 million TWOU shares are outstanding with a float of 75.42 million shares on hand for trading. On Oct 13, 2022, short shares totaled 7.24 million, which was 9.35% higher than short shares on Sep 14, 2022. In addition to Mr. Christopher J. Paucek as the firm’s Co-Founder, CEO & Director, Mr. Paul S. Lalljie serves as its CFO & Principal Accounting Officer.

Institutional Ownership:

Through their ownership of 95.87% of TWOU’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 50.19% of TWOU, in contrast to 47.43% held by mutual funds. Shares owned by individuals account for 18.13%. As the largest shareholder in TWOU with 12.04% of the stake, ARK Investment Management LLC holds 9,412,719 shares worth 9,412,719. A second-largest stockholder of TWOU, The Vanguard Group, Inc., holds 7,031,903 shares, controlling over 8.99% of the firm’s shares. Greenvale Capital LLP is the third largest shareholder in TWOU, holding 5,934,270 shares or 7.59% stake. With a 7.96% stake in TWOU, the ARK Innovation ETF is the largest stakeholder. A total of 6,220,934 shares are owned by the mutual fund manager. The Nikko AM Global Umbrella Fund – A, which owns about 4.68% of TWOU stock, is the second-largest Mutual Fund holder. It holds 3,661,500 shares valued at 22.96 million. Vanguard Total Stock Market Index holds 3.02% of the stake in TWOU, owning 2,364,776 shares worth 14.83 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for TWOU since 14 analysts follow the stock currently. There are 5 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 7 believe that the stock is worth HOLDING, 2 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With TWOU analysts setting a high price target of $19.00 and a low target of $7.00, the average target price over the next 12 months is $10.29. Based on these targets, TWOU could surge 185.29% to reach the target high and rise by 5.11% to reach the target low. Reaching the average price target will result in a growth of 54.5% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. TWOU will report FY 2022 earnings on 02/08/2024. Analysts have provided yearly estimates in a range of -$0.07 being high and -$0.34 being low. For TWOU, this leads to a yearly average estimate of -$0.18. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. 2U Inc. surprised analysts by -$0.07 when it reported -$0.05 EPS against a consensus estimate of $0.01. The surprise factor in the prior quarter was $0.08. Based on analyst estimates, the high estimate for the next quarter is $0.34 and the low estimate is $0.05. The average estimate for the next quarter is thus $0.21.

Summary of Insider Activity:

Insiders traded TWOU stock several times over the past three months with 0 Buys and 4 Sells. In these transactions, 0 shares were bought while 57,153 shares were sold. The number of buy transactions has increased to 42 while that of sell transactions has risen to 20 over the past year. The total number of shares bought during that period was 1,451,697 while 249,726 shares were sold.

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