2U Inc. (NASDAQ: TWOU) Not A Good Play Anymore?


    ARK Investment Management LLC has recently announced that it has increased stake in 2U Inc. (NASDAQ:TWOU) by 42.39%. After grabbing 9.62 million shares, the institutional investor is now in possession of 2.87 million shares of the Consumer Defensive Company. The new investment brought the stake of investor firm to 15.05% having worth around $453.24 million. Moreover, ArrowMark Colorado Holdings LLC increased its share by 41224.0 to have a control over 5.8 million shares. And Nikko Asset Management Americas,.. raised its holdings to 0.4 million shares by acquiring 5.41 million shares or 8.46% of the stake.

    2U Inc. (TWOU) concluded trading on 08/27/20 at a closing price of $38.64, with 1.03 million shares of worth about $39.61 million changed hands on the day. Weekly performance of the stock remained negative as price took a plunge of -2.15% during that period and on Thursday the price saw a loss of about -3.35%. Currently the company’s common shares owned by public are about 64.08M shares, out of which, 58.06M shares are available for trading.

    A deeper look into what the analysts at Wall Street are thinking about the price target of this stock provides us with the following: 15 analysts are covering the TWOU stock and their offered price forecasts bring an average price target of $50.75. Over the next 12 months, analysts forecasted that the stock’s price could jump as high as $65.00 and could fall to a lowest price of $40.00. Analysts also issued an outlook of 2.00 for the 2U Inc. stock for next 12 months. The stock’s current price level is 23.86% above of average price target set by the analysts, while a rise to estimated low would result in gain of 3.4 for the stock. However, touching the estimated high of $65.00 would mean a gain of 40.55% for the stock.

    According to filings with the U.S. Securities and Exchange Commission (SEC), insiders took part in trade of the company’s stock for 54 times over the past 12 months. They bought 703,621 shares in 40 of the transactions. In 14 selling transactions, insiders dumped 395,378 shares.

    ARK Innovation ETF, Nikko AM Global Umbrella Fund – A, and First Trust Dow Jones Internet In are the top 3 mutual funds which are holding stakes in 2U Inc. ARK Innovation ETF is currently holding 6.17 million shares of worth totaling $290.62 million. The company recently came buying 65909.0 shares which brought its stake up to 9.65% of the company’s outstanding shares. Nikko AM Global Umbrella Fund – A bought 4.17 million shares, after which its hold over company’s outstanding shares expand to 6.54%, leaving 4.18 million shares with the mutual fund that have a worth of about $196.91 million. First Trust Dow Jones Internet In, after buying 2.46 million shares, have now control over 3.85% of the stake in the company. It holds 0.23 million shares of worth $115.84 million.

    2U Inc. (NASDAQ: TWOU) started trading at $40.25, above $0.27 from concluding price of the previous day. However, the stock finished the trading on the day at a closing price of $38.64, or with a loss of -3.35%. Stock saw a price change of -2.15% in past 5 days and over the past one month there was a price change of -10.72%. Year-to-date (YTD), TWOU shares are showing a performance of 61.07% which increased to 124.13% when we look at its performance for past 12 months. Over the period of past 52 weeks, stock dropped to lowest price of $11.51 but also hit the highest price of $49.46 during that period. While comparing its average daily trading volume of 1.73 million shares, we see that about 1.03 million changed hands on the day. The stock is currently trading -6.18% below its 20-day simple moving average (SMA20), while that difference is down -4.38% for SMA50 and it goes to 34.66% higher than SMA200.

    ARK Investment Management LLC acquired 9.62 million shares of 2U Inc. having value of about $453.24 million. Data submitted at the U.S SEC by ARK Investment Management LLC revealed that the firm now holds 2.87 million shares in the company valued at close to $110711096.16, or have control over 42.39% stake in the company. 2U Inc. (NASDAQ: TWOU) currently have 64.08M outstanding shares and institutions hold larger chunk of about 99.10% of that. Holding of mutual funds in the company is about 50.97% while other institutional holders and individual stake holders have control over 59.93% and 18.96% of the stake respectively.

    The stock has a current market capitalization of $2.83B and its 3Y-monthly beta is at 0.88. It has posted earnings per share of -$4.91 in the same period. It has Quick Ratio of 1.50 while making debt-to-equity ratio of 0.39. Volatility of a stock is a metric used to know how much the price of that stock is under influence and for TWOU, volatility over the week remained 4.63% while standing at 5.14% over the month.

    Analysts are in expectations that 2U Inc. (TWOU) stock would likely to be making an EPS of -$0.25 in the current quarter, while forecast for next quarter ESPS is -$0.07 and it is -$0.64 for next year. For the current quarter EPS, analysts have given the company a lowest target -$0.37 which is -$0.14 at the higher side of the target for the same. When we compare those targets with actual EPS, we find that company posted an EPS of -$0.41 in the same quarter a year ago. Stock’s fiscal year EPS is expected to drop by -458.10% while it is estimated to increase by 35.40% in next year. EPS is likely to grow at an annualized rate of 25.00% for next 5-years, compared to annual growth of -33.40% made by the stock over the past 5-years.

    Analysts at 15 brokerage firms have issued recommendations for the 2U Inc. (TWOU)’s stock and average of those rates the stock at a “Moderate Buy” and assign it a score of 2.00. Out of those 15 Wall Street analysts, 9 recommended a “Buy” rating, while 5 were in favor recommending the stock as a “Hold” and 0 analyst recommended the stock as “Sell”.

    Digging deeper we find that several firms have released their research notes about the support levels of the stock. Most recent of them is a note released by Credit Suisse on July 31, 2020 offering an Outperform rating for the stock and assigned a target price of $48 to it. Coverage by Jefferies stated 2U Inc. (TWOU) stock as a Buy in their note to investors on July 16, 2020, suggesting a price target of $50 for the stock. On June 30, 2020, KeyBanc Capital Markets Initiated their recommendations, while on May 22, 2020, Piper Sandler Initiated their ratings for the stock with a price target of $42. Stock get a Buy rating from Needham on May 21, 2020.


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