2U Reports Q4: Everything You Need To Know Ahead Of Earnings

Adam Hejl /
2022/02/08 6:37 am EST
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Online education platform, 2U (NASDAQ:TWOU) will be reporting results tomorrow afternoon. Here's what you need to know.

Last quarter 2U reported revenues of $232.3 million, up 15.5% year on year, in line with analyst expectations. It was a mixed quarter for the company, with a meaningful improvement in gross margin but a slow revenue growth.

Is 2U buy or sell heading into the earnings? Read our full analysis here, it's free.

This quarter analysts are expecting 2U's revenue to grow 12.9% year on year to $243.2 million, slowing down from the 31.9% year-over-year increase in revenue the company had recorded in the same quarter last year. Loss is expected to come in at -$0.25 per share.

2U Total Revenue

Majority of analysts covering the company have reconfirmed their estimates over the last thirty days, suggesting they are expecting the business to stay the course heading into the earnings. The company has a history of exceeding Wall St's expectations, beating revenue estimates every single time over the past two years on average by 2.86%.

Looking at 2U's peers in the vertical software segment, only Unity (NYSE:U) has so far reported results, delivering top-line growth of 43.3% year on year, and beating analyst estimates by 6.81%. The stock traded up 17.5% on the results. Read our full analysis of Unity's earnings results here.

The whole tech sector has been facing a sell-off since late last year and while some of the software stocks have fared somewhat better, they have not been spared, with share price declining 6.46% over the last month. 2U is down 8.44% during the same time, and is heading into the earnings with analyst price target of $35.1, compared to share price of $16.58.

One way to find opportunities in the market is to watch for generational shifts in the economy. Almost every company is slowly finding itself becoming a technology company and facing cybersecurity risks and as a result, the demand for cloud-native cybersecurity is skyrocketing. This company is leading a massive technological shift in the industry and with revenue growth of 70% year on year and best-in-class SaaS metrics it should definitely be on your radar.

The author has no position in any of the stocks mentioned.