Oppenheimer Reiterates Outperform On 2U, Sees 11% Upside For The Stock


Oppenheimer analyst Brian Schwartz reiterated an Outperform rating on 2U Inc (NASDAQ:TWOU) with a price target of $20, which represents a potential upside of 12% from where the stock is currently trading.

Schwartz commented, “2U’s revenue growth and path to profitability trends shone bright in 3Q as results exceeded consensus and management again raised 2014 guidance. We think secular tailwinds (SaaS, digital-learning, rising tuition/student debt) and good execution are strengthening 2U’s leading market-positioning. We further believe fundamentals for SaaS-based Higher Ed Tech suppliers have never been better, and there is a long runway for growth with significant long-term earnings power for the early leaders like 2U. Bottom Line: Management’s consistent outperformance since IPO is impressive and we see broad opportunities for the company beyond school-as-a-service; the most obvious areas to us are recruiting, learning, collaboration and/or productivity tools given the stickiness of providing institutions/colleges a comprehensive SaaS operating infrastructure for online degree programs.”

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Brian Schwartz has a total average return of 11.9% and a 67.9% success rate. Schwartz is ranked #610 out of 3363 analysts.

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