Please ensure Javascript is enabled for purposes of website accessibility

Why 2U Stock Jumped Today

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

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

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.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

2U, Inc. Stock Quote
2U, Inc.
$9.71 (-4.90%) $0.50

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 06/27/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.