Barrington Believes 2U Inc (NASDAQ: TWOU) Still Has Room to Grow

In a report released today, Alexander Paris from Barrington reiterated a Buy rating on 2U Inc (NASDAQ: TWOU), with a price target of $100. The company’s shares opened today at $87.45, close to its 52-week high of $91.

Paris wrote:

“We view this premium as warranted given that 2U’s projected growth rate is much higher at 43%/32% in 2018/2019, compared to an average of 18%/19% for the Ed Tech peer group and 15%/14% for the vertical‐focused SaaS peer group. Given 2U’s superior growth rate, revenue growth visibility/predictability and the size of its potential market, which is enhanced by the recent acquisition of GetSmarter (short courses) and its entry into the international graduate program market, we are reiterating our OUTPERFORM investment rating and raising our 12‐month price target to $100 (from $92), which assumes a 9.5x multiple on our forward revenue estimate a year from now.”

According to TipRanks.com, Paris is a 4-star analyst with an average return of 10.7% and a 55.2% success rate. Paris covers the Services sector, focusing on stocks such as Adtalem Global Education Inc, American Public Education, and Capella Education Company.

Currently, the analyst consensus on 2U Inc is Strong Buy and the average price target is $95.56, representing a 9.3% upside.

In a report released today, Needham also reiterated a Buy rating on the stock with a $95 price target.

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The company has a one-year high of $91 and a one-year low of $39.58. Currently, 2U Inc has an average volume of 514.4K.

Based on the recent corporate insider activity of 48 insiders, corporate insider sentiment is negative on the stock.

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2U, Inc. provides cloud-based software-as-a-service solutions for nonprofit colleges and universities to deliver education to qualified students. The company’s cloud-based SaaS platform solutions include online campus, an online learning platform that enables its clients to offer educational content together with instructor-led classes in a live, intimate, and engaging setting through proprietary Web-based and mobile applications; and content management system, which enables its clients to author, review, and deploy asynchronous content into their online programs. Its cloud-based SaaS platform solutions also comprise application processing portal that automates the online application process for prospective students of its client’s programs; and customer relationship management deployments, which serve as the data hub for scheduling, student acquisition, student application, faculty admissions review, enrollment and student support for each program. The company offers a suite of technology-enabled services, including content development, student acquisition, and state authorization services, as well as application advising, student and faculty support and in-program student field placements that support the lifecycle of a higher education program or course. 2U was founded by Christopher J. Paucek in April 2008 and is headquartered in Lanham, MD.