Compass Point Raises PT as 2U (TWOU) Raises Guidance

Compass Point reiterates their Buy rating on 2U, Inc. (NASDAQ: TWOU), and raised the price target to $31 (from $29), after TWOU reported another EPS beat (5th in a row), and as revenues and adjusted EBITDA come in ahead of consensus, and guidance.Revenue for TWOU came in at a reported $34.6M (a 31% YOY increase), beating consensus of $33.6M and guidance of $33.3-$33.8M. TWOU increased its 2015 guidance for revenue to $145.6-$147.4M, up from $143.1-$145.6M. Raised adjusted EBITDA to ($10.2M)-($8.7M), up from ($12.6M)-($10.6M), and adjusted EPS went up to ($0.45)-($0.41), from ($0.50)-($0.46).

Compass Point analyst, Michael Tarkan, commented on TWOU, saying, "While shares have outperformed, we see additional upside as the company continues to deliver high quality programs, strong revenue growth, and improving margins. From a competitive standpoint, we believe management continues to build a substantial moat around the company with its top-tier portfolio of schools, strong student outcomes, and wide-ranging servicing capabilities. Additionally, revenue visibility is significant, and while profitability remains somewhat distant given new program investments, the embedded earnings pipeline from existing programs continues to accelerate."

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 $26.57 yesterday.

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