Needham & Company Starts 2U, Inc. (TWOU) at Buy

Needham & Company initiates coverage on 2U, Inc. (NASDAQ: TWOU) with a Buy rating and a price target of $40.00.

Analyst Kerry Rice commented, "We are initiating coverage of 2U with a Buy and $40 PT. With over 18 programs launched and over 17,800 enrolled students to date, we believe 2U has a proven track record. Program selection and marketing prowess deliver long-term revenue visibility, the company signs 10-15 year contracts with its academic partners, and it is successfully renewing these contracts. We believe 2U generally overdelivers enrollment expectations with its strong student acquisition. 2U’s unit economics are positive and improving, and we believe several levers exist to lower acquisition costs. Our first and second program NPV analysis indicates an overall contribution margin of 36% is achievable, well above FY16 EBITDA estimate of 0.5%."

For an analyst ratings summary and ratings history on 2U, Inc. click here. For more ratings news on 2U, Inc. click here.

Shares of 2U, Inc. closed at $32.70 yesterday.

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