2U (TWOU) To Report Earnings Tomorrow: Here Is What To Expect

Kayode Omotosho /
2023/04/25 3:24 am EDT

Online education platform, 2U (NASDAQ:TWOU) will be announcing earnings results tomorrow after the bell. Here's what investors should know.

Last quarter 2U reported revenues of $236 million, down 3.11% year on year, in line with analyst expectations. It was a mixed quarter for the company, with very strong guidance for the next year but 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 decline 5.84% year on year to $238.5 million, a deceleration on the 8.97% year-over-year increase in revenue the company had recorded in the same quarter last year. Adjusted loss is expected to come in at -$0.07 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 only missed Wall St's revenue estimates once over the last two years, and has on average exceeded top line expectations by 0.44%.

Looking at 2U's peers in the vertical software segment, some of them have already reported Q1 earnings results, giving us a hint of what we can expect. Cadence delivered top-line growth of 13.3% year on year, beating analyst estimates by 1.49%. Cadence was down 1.9%. Read our full analysis of Cadence's results here.

Investors in the vertical software segment have had steady hands going into the earnings, with the stocks up on average 0.36% over the last month. 2U is down 23.4% during the same time, and is heading into the earnings with analyst price target of $11.2, compared to share price of $5.18.

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.