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2U Inc (TWOU) Stock Fundamental Analysis

NASDAQ:TWOU - Nasdaq - US90214J2006 - Common Stock - Currency: USD

1.58  -0.86 (-35.25%)

After market: 1.5007 -0.08 (-5.02%)

Fundamental Rating

2

Overall TWOU gets a fundamental rating of 2 out of 10. We evaluated TWOU against 71 industry peers in the Diversified Consumer Services industry. TWOU may be in some trouble as it scores bad on both profitability and health. TWOU does not seem to be growing, but still is valued expensively.


Dividend Valuation Growth Profitability Health

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2

1. Profitability

1.1 Basic Checks

In the past year TWOU was profitable.
TWOU had a positive operating cash flow in the past year.
TWOU had negative earnings in each of the past 5 years.
The reported operating cash flow has been mixed in the past 5 years: TWOU reported negative operating cash flow in multiple years.
TWOU Yearly Net Income VS EBIT VS OCF VS FCFTWOU Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 -100M -200M -300M

1.2 Ratios

Looking at the Return On Assets, with a value of -22.21%, TWOU is doing worse than 67.69% of the companies in the same industry.
TWOU has a worse Return On Equity (-188.75%) than 78.46% of its industry peers.
TWOU has a Return On Invested Capital (0.01%) which is comparable to the rest of the industry.
Industry RankSector Rank
ROA -22.21%
ROE -188.75%
ROIC 0.01%
ROA(3y)-16.26%
ROA(5y)-16.52%
ROE(3y)-77.58%
ROE(5y)-57.76%
ROIC(3y)N/A
ROIC(5y)N/A
TWOU Yearly ROA, ROE, ROICTWOU Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 -50 -100

1.3 Margins

TWOU has a Operating Margin of 0.01%. This is comparable to the rest of the industry: TWOU outperforms 52.31% of its industry peers.
The Gross Margin of TWOU (54.64%) is better than 63.08% of its industry peers.
In the last couple of years the Gross Margin of TWOU has declined.
Industry RankSector Rank
OM 0.01%
PM (TTM) N/A
GM 54.64%
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y2.9%
GM growth 5Y-2.84%
TWOU Yearly Profit, Operating, Gross MarginsTWOU Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 20 -20 40 -40 60

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1

2. Health

2.1 Basic Checks

TWOU has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
The number of shares outstanding for TWOU has been reduced compared to 1 year ago.
TWOU has less shares outstanding than it did 5 years ago.
TWOU has a worse debt/assets ratio than last year.
TWOU Yearly Shares OutstandingTWOU Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 20M 40M 60M
TWOU Yearly Total Debt VS Total AssetsTWOU Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 500M 1B 1.5B 2B

2.2 Solvency

TWOU has an Altman-Z score of -0.90. This is a bad value and indicates that TWOU is not financially healthy and even has some risk of bankruptcy.
The Altman-Z score of TWOU (-0.90) is worse than 70.77% of its industry peers.
A Debt/Equity ratio of 5.33 is on the high side and indicates that TWOU has dependencies on debt financing.
TWOU has a worse Debt to Equity ratio (5.33) than 84.62% of its industry peers.
Industry RankSector Rank
Debt/Equity 5.33
Debt/FCF N/A
Altman-Z -0.9
ROIC/WACC0
WACC5.35%
TWOU Yearly LT Debt VS Equity VS FCFTWOU Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 200M 400M 600M 800M

2.3 Liquidity

TWOU has a Current Ratio of 0.91. This is a bad value and indicates that TWOU is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 0.91, TWOU is doing worse than 66.15% of the companies in the same industry.
A Quick Ratio of 0.91 indicates that TWOU may have some problems paying its short term obligations.
With a Quick ratio value of 0.91, TWOU is not doing good in the industry: 66.15% of the companies in the same industry are doing better.
Industry RankSector Rank
Current Ratio 0.91
Quick Ratio 0.91
TWOU Yearly Current Assets VS Current LiabilitesTWOU Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 200M 400M 600M

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3

3. Growth

3.1 Past

TWOU shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 37450.00%, which is quite impressive.
The Revenue has decreased by -4.47% in the past year.
TWOU shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 18.10% yearly.
EPS 1Y (TTM)37450%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%-6500%
Revenue 1Y (TTM)-4.47%
Revenue growth 3Y6.89%
Revenue growth 5Y18.1%
Sales Q2Q%-16.82%

3.2 Future

Based on estimates for the next years, TWOU will show a very negative growth in Earnings Per Share. The EPS will decrease by -26.83% on average per year.
TWOU is expected to show a decrease in Revenue. In the coming years, the Revenue will decrease by -0.04% yearly.
EPS Next Y-55.1%
EPS Next 2Y-42.67%
EPS Next 3Y-26.83%
EPS Next 5YN/A
Revenue Next Year-16.63%
Revenue Next 2Y-4.79%
Revenue Next 3Y-0.04%
Revenue Next 5YN/A

3.3 Evolution

When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
TWOU Yearly Revenue VS EstimatesTWOU Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 200M 400M 600M 800M
TWOU Yearly EPS VS EstimatesTWOU Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 0 10 -10 -20 -30

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3

4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 0.21, which indicates a rather cheap valuation of TWOU.
Based on the Price/Earnings ratio, TWOU is valued cheaply inside the industry as 98.46% of the companies are valued more expensively.
When comparing the Price/Earnings ratio of TWOU to the average of the S&P500 Index (27.30), we can say TWOU is valued rather cheaply.
The Forward Price/Earnings Ratio is negative for TWOU. No positive earnings are expected for the next year.
Industry RankSector Rank
PE 0.21
Fwd PE N/A
TWOU Price Earnings VS Forward Price EarningsTWOU Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 0 10 20

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, TWOU is valued cheaper than 83.08% of the companies in the same industry.
Industry RankSector Rank
P/FCF N/A
EV/EBITDA 7.07
TWOU Per share dataTWOU EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 0 200 -200

4.3 Compensation for Growth

A cheap valuation may be justified as TWOU's earnings are expected to decrease with -26.83% in the coming years.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-42.67%
EPS Next 3Y-26.83%

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0

5. Dividend

5.1 Amount

TWOU does not give a dividend.
Industry RankSector Rank
Dividend Yield N/A

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2U Inc

NASDAQ:TWOU (8/6/2024, 8:00:03 PM)

After market: 1.5007 -0.08 (-5.02%)

1.58

-0.86 (-35.25%)

Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryDiversified Consumer Services
Earnings (Last)07-31 2024-07-31/amc
Earnings (Next)11-07 2024-11-07/amc
Inst Owners223.4%
Inst Owner Change0%
Ins Owners315.07%
Ins Owner Change0%
Market Cap4.44M
Analysts47.5
Price Target21.42 (1255.7%)
Short Float %N/A
Short RatioN/A
Dividend
Industry RankSector Rank
Dividend Yield N/A
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)5.46%
Min EPS beat(2)-26.16%
Max EPS beat(2)37.09%
EPS beat(4)1
Avg EPS beat(4)-34.9%
Min EPS beat(4)-139.54%
Max EPS beat(4)37.09%
EPS beat(8)3
Avg EPS beat(8)-26.22%
EPS beat(12)7
Avg EPS beat(12)-10.33%
EPS beat(16)11
Avg EPS beat(16)-1.06%
Revenue beat(2)0
Avg Revenue beat(2)-5.89%
Min Revenue beat(2)-10.94%
Max Revenue beat(2)-0.85%
Revenue beat(4)1
Avg Revenue beat(4)-4.57%
Min Revenue beat(4)-10.94%
Max Revenue beat(4)0.52%
Revenue beat(8)1
Avg Revenue beat(8)-3.85%
Revenue beat(12)1
Avg Revenue beat(12)-3.05%
Revenue beat(16)5
Avg Revenue beat(16)-1.51%
PT rev (1m)0%
PT rev (3m)2300%
EPS NQ rev (1m)12.18%
EPS NQ rev (3m)-4707.57%
EPS NY rev (1m)33523.9%
EPS NY rev (3m)2746.3%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-2.29%
Revenue NY rev (1m)0.2%
Revenue NY rev (3m)0.23%
Valuation
Industry RankSector Rank
PE 0.21
Fwd PE N/A
P/S 0
P/FCF N/A
P/OCF 0.11
P/B 0.03
P/tB N/A
EV/EBITDA 7.07
EPS(TTM)7.47
EY472.78%
EPS(NY)-0.5
Fwd EYN/A
FCF(TTM)-1.49
FCFYN/A
OCF(TTM)14.71
OCFY931.08%
SpS322.36
BVpS59.99
TBVpS-298.4
PEG (NY)N/A
PEG (5Y)N/A
Profitability
Industry RankSector Rank
ROA -22.21%
ROE -188.75%
ROCE 0.01%
ROIC 0.01%
ROICexc 0.01%
ROICexgc 0.64%
OM 0.01%
PM (TTM) N/A
GM 54.64%
FCFM N/A
ROA(3y)-16.26%
ROA(5y)-16.52%
ROE(3y)-77.58%
ROE(5y)-57.76%
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3YN/A
ROICexc growth 5YN/A
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y2.9%
GM growth 5Y-2.84%
F-Score5
Asset Turnover0.63
Health
Industry RankSector Rank
Debt/Equity 5.33
Debt/FCF N/A
Debt/EBITDA 8.16
Cap/Depr 41.4%
Cap/Sales 5.03%
Interest Coverage 250
Cash Conversion 37.54%
Profit Quality N/A
Current Ratio 0.91
Quick Ratio 0.91
Altman-Z -0.9
F-Score5
WACC5.35%
ROIC/WACC0
Cap/Depr(3y)55.38%
Cap/Depr(5y)70.03%
Cap/Sales(3y)6.81%
Cap/Sales(5y)8.6%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)37450%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%-6500%
EPS Next Y-55.1%
EPS Next 2Y-42.67%
EPS Next 3Y-26.83%
EPS Next 5YN/A
Revenue 1Y (TTM)-4.47%
Revenue growth 3Y6.89%
Revenue growth 5Y18.1%
Sales Q2Q%-16.82%
Revenue Next Year-16.63%
Revenue Next 2Y-4.79%
Revenue Next 3Y-0.04%
Revenue Next 5YN/A
EBIT growth 1Y100.26%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year35.34%
EBIT Next 3Y18.37%
EBIT Next 5YN/A
FCF growth 1Y95.82%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y260.41%
OCF growth 3YN/A
OCF growth 5YN/A