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Why 2U Stock Jumped Today

By Timothy Green - May 5, 2020 at 2:04PM

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Analysts are becoming more optimistic about the education technology company.

What happened

Shares of 2U (TWOU -4.90%) jumped on Tuesday after the education technology company received two analyst upgrades to start the week. These upgrades follow a first-quarter report on April 30 that beat analyst expectations. The stock was up about 10% at 1:30 p.m. EDT.

So what

On Monday, analysts at Baird upgraded 2U stock from neutral to outperform on the possibility that some college campuses will remain closed for part of the 2020-2021 school year. Baird attached a $30 price target to the stock.

A rising chart.

Image source: Getty Images.

On Tuesday, an analyst at Berenberg also upgraded 2U stock from hold to buy. The analyst believes that online learning is a top priority at universities, potentially driving higher demand for 2U's products and services. Berenberg also has a $30 price target on the stock.

Now what

These analyst upgrades come after a solid first-quarter report that featured robust growth. Total revenue was up 44% to $175.5 million, driven by a tripling of alternative credential segment revenue. 2U's losses exploded as costs grew, but the company beat analyst expectations on that front as well.

While it's impossible to predict the long-term impact on universities from the pandemic, 2U is poised to benefit from remote learning for the time being.

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