UPDATE: Piper Sandler Downgrades 2U, Inc. (TWOU) to Underweight, 'Regulatory Overhang Elevates Downside Risk'
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Piper Sandler analyst Arvind Ramnani downgraded 2U, Inc. (NASDAQ: TWOU) from Neutral to Underweight with a price target of $9.00 (from $10.00).
The analyst comments "We are downgrading TWOU given multiple headwinds facing the industry and business model, including increased regulatory risk related to revenue sharing arrangements, University partners looking to in-source online program management, and potential pressure from digital learning fatigue and return to in-person education. We acknowledge that 2U could see improved profitability given the EdX acquisition should significantly lower its CAC, and thus the company may be an attractive acquisition target. However, in our view the regulatory scrutiny risks are material, thereby making it challenging for us to be constructive on 2U. We are thereby downgrading TWOU to Underweight, PT to $9."
Shares of 2U, Inc. closed at $10.60 yesterday.
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