Logo image of TWOU

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. Both the profitability and financial health of TWOU have multiple concerns. TWOU does not seem to be growing, but still is valued expensively.


Dividend Valuation Growth Profitability Health

Quickly go to:

2

1. Profitability

1.1 Basic Checks

TWOU had positive earnings in the past year.
TWOU had a positive operating cash flow in the past year.
In the past 5 years TWOU always reported negative net income.
In multiple years TWOU reported negative operating cash flow during the last 5 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.
Looking at the Return On Equity, with a value of -188.75%, TWOU is doing worse than 78.46% of the companies in the same industry.
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 (0.01%) which is comparable to the rest of the industry.
With a decent Gross Margin value of 54.64%, TWOU is doing good in the industry, outperforming 63.08% of the companies in the same industry.
TWOU's Gross Margin has declined in the last couple of years.
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

More info and screens

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.
Compared to 1 year ago, TWOU has less shares outstanding
TWOU has less shares outstanding than it did 5 years ago.
The debt/assets ratio for TWOU is higher compared to a year ago.
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

Based on the Altman-Z score of -0.90, we must say that TWOU is in the distress zone and has some risk of bankruptcy.
The Altman-Z score of TWOU (-0.90) is worse than 70.77% of its industry peers.
TWOU has a Debt/Equity ratio of 5.33. This is a high value indicating a heavy dependency on external financing.
With a Debt to Equity ratio value of 5.33, TWOU is not doing good in the industry: 84.62% of the companies in the same industry are doing better.
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.
With a Current 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.
TWOU has a Quick 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.
The Quick ratio of TWOU (0.91) is worse than 66.15% of its industry peers.
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

More info and screens

3

3. Growth

3.1 Past

The Earnings Per Share has grown by an impressive 37450.00% over the past year.
Looking at the last year, TWOU shows a decrease in Revenue. The Revenue has decreased by -4.47% in the last year.
The Revenue has been growing by 18.10% on average over the past years. This is quite good.
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.
Based on estimates for the next years, TWOU will show a decrease in Revenue. The Revenue will decrease by -0.04% on average per year.
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

The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
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

More info and screens

3

4. Valuation

4.1 Price/Earnings Ratio

Based on the Price/Earnings ratio of 0.21, the valuation of TWOU can be described as very cheap.
Compared to the rest of the industry, the Price/Earnings ratio of TWOU indicates a rather cheap valuation: TWOU is cheaper than 98.46% of the companies listed in the same industry.
TWOU is valuated cheaply when we compare the Price/Earnings ratio to 26.76, which is the current average of the S&P500 Index.
TWOU is expected to report negative earnings next year, which makes the Forward Price/Earnings Ratio negative.
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 30

4.2 Price Multiples

83.08% of the companies in the same industry are more expensive than TWOU, based on the Enterprise Value to EBITDA ratio.
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%

More info and screens

0

5. Dividend

5.1 Amount

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

More info and screens

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