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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
2U, Inc. (XNAS:TWOU) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
TWOU
Name:
2U, INC. (XNAS:TWOU)
Sector:
- 19322.00K
Industry:
Education & Training Services
CEO:
Mr. Christopher Paucek
Total Employees:
3,982
Our Technological Advancement Rating
Our Rating:
D
Technological advancement compared to industry is -738.13% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF 2U, INC.(TWOU) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND EDUCATION & TRAINING SERVICES INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
7.01
One Month Price Target:
$7.05
Six Month Price Target :
$7.25
Likely Price in One Year's Time:
Ticker:
$7.5
Likely Trading Range Today Under (Normal Volatility)
$6.95
Price Upper limit ($) :
$7.07
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$6.29
This week:
$5.39
This month :
$3.77
Other Primary facts
Market Cap:
543.17M
Market Cap Classification:
Small Cap
Number of Shares
IPO Date:
77.49M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
25.82%
-47.86%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$10.37
$8.85
$3.65
$5.17
Medium risk (<10%) entry points
Buy Call
Sell Call
$8.35
Buy Put:
Sell Put:
$8.03
$5.66
$5.99
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
TWOU
Sharpe Ratio:
-0.80%
Comparison:
TWOU, is amongst the top 40% stocks with lowest risk-adjusted returns
Sharpe ratio is 4.39% higher than the industry
& is -134.91% lower than the market/S&P 500 average
Average Returns/Yield of
TWOU
Daily returns:
-0.03%
Weekly returns:
-0.16%
Monthly returns:
-0.62%
Yearly returns:
-3.84%
Comparison of returns:
Average annual returns/yield (last 3 years) is 94.11% above industry average
Classification:
TWOU, is amongst the top 40% lowest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.62
Statistical test of Returns:
TWOU has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
5.01%
Weekly Volatility:
11.21%
Monthly Volatility:
22.42%
Yearly Volatility:
77.67%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.41%
Volatility in last five trading days has been -71.96% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-10.33%
Weekly VaR:
-23.09%
Monthly VaR:
-46.19%
How Much Can the price of
TWOU
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-41%
Worst case (decline):
>85%
This translates to price declining to:
$4.12
This translates to price declining to:
$1.05
Severe Crash Probability
Risk of crash in next 6/12 months: Low (<25%)
What is Value at Risk (VaR)?
Risk Fundamentals
TWOU is a 226.00% riskier investment compared to the market/S&P 500 & is 179.28% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 43.80% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
TWOU
Beta in relation to market/S&P 500--1.03
Expected beta in 1 year's time:
1.122
Expected beta in 3 year's time:
1.586
Unlevered (debt free) Beta:
0.403
Beta in relation to Nasdaq (XNAS):
1.461
Beta in relation to all global stocks::
0.742
Beta Comparison & Analysis
Beta of competitors/peers::
0.633
Beta is 62.98% higher than peers
Average Industry Beta:
0.833
Beta is 23.70% above industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
-
-
Alpha provided | Alpha Analysis
Alpha provided:
-0.177
Alpha is 39.11% above industry average alpha yield
Alpha is -1124% below the market average
Analysis of Cost of Capital of
TWOU
Equity cost of capital:
0.102
Equity cost of capital is 15.27% above industry mean WACC
Unlevered (without debt) cost of capital:
3.99%
Before-tax cost of debt:
5.51%
After-tax cost of debt:
4.36%
Overall debt rating:
Lower BB medium grade (Fifth highest grade)
Weighted average cost of capital (WACC):
4.36%
WACC is 2.66% above industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$12.47
Revenue growth rate per share of (3Y):
0.83
Annual revenue growth rate is 348.48% above the industry average
EPS:
-$3.64
Expected Annual growth rate of EPS (3Y):
-12.00%
Expected future EPS growth rate is 2.71% higher than the Education & Training Services industry
Free cash flow (FCF) per share:
-
-
-
Debt per share
$13.23
EBITDA per share
-$1.31
Valuation Analysis Today of
TWOU
P/E Ratio:
-
P/E Ratio of Competitors/Peers:
306.79
-
-
TWOU is -118.18% undervalued if valued using industry average P/E ratio
-
-
P/S (Price to Sales ratio):
0.56
Price to sales ratio is -77.39% below the industry mean
P/B (Price to book value ratio):
0.83
-
-
Net income growth rate (3Y):
322.54%
Net income growth rate is -784.58% lower than the industry average net income growth rate
Dividend Analysis
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Dividend History:
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
--$0.00
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
156.89%
Net debt to equity ratio:
125.70%
Debt to assets ratio:
49.45%
Net debt to assets ratio:
39.62%
Debt-to-asset ratio is 3.87% above industry average
Ability to repay debt:
Interest coverage ratio:
-1.77
Interest coverage ratio is -102.27% less than industry average
Looking forward:
Debt growth rate:
238.27%
Annual debt growth is 2124% higher than industry average debt growth rate
Debt repayment rate in last quarter: 0.19%
Analysis of Key Statistics
Correlation of price movement with the market:
0.443
Statistical significance of correlation:
TWOU has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.406
Stock price is 9.12% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.406
Correlation of price movement with Nasdaq (^IXIC):
-0.069
Covariance of price movement with the market:
-0.202
Kurtosis
15.069
Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns
Skewness of returns:
-1.342
Returns are left (negative) skewed; mean returns are lower than median and mode returns
Fundamental Analysis & Dupont Analysis of
TWOU
Gross Profit Margin Ratio:
286%
Operating Profit Margin Ratio:
-25.00%
Operating profit margin is -282.49% lower than the industry
Net Profit Margin Ratio:
286%
Effective Tax Rate:
0.52%
Effective tax rate is -98.55% lower than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
-42.09%
Return on equity (ROE) is -316.46% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
-13.27%
Return on assets (ROA) is -311.06% lower than the industry
Financial Leverage:
2.0x
Current Ratio:
1.09
Current ratio is -67.85% below industry average
Cash Conversion Cycle (days):
26
Cash conversion cycle is 49.03% above industry average
The remaining useful life of property plant & equipment is: 2.7 years
Stock based compensation to net income ratio:
-8.88%
In-depth Efficiency Analysis
Revenue generated per employee:
242.7K
Each employee generates -12% less revenue than industry average revenue per employee
EBITDA generated per employee:
- 25.4K
Each employee generates -147% less EBITDA than industry average revenue per employee
Profit generated per employee:
- 69.1K
Each employee generates -434% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 4.9K
Each employee generates -145% less free cash flow than industry average revenue per employee
Assets/Capital per employee
412.9K
Each employee generates -145% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
TWOU
Strategic Education, Inc. (XNAS:STRA)
SOVOS BRANDS, INC. (XNAS:SOVO)
THE ANDERSONS, INC. (XNAS:ANDE)
THE CHEFS' WAREHOUSE, INC. (XNAS:CHEF)
INGLES MARKETS, INCORPORATED (XNAS:IMKTA)
Tattooed Chef, Inc. (XNAS:TTCF)
ARCO PLATFORM LIMITED (XNAS:ARCE)
MISSION PRODUCE, INC. (XNAS:AVO)
JOHN B. SANFILIPPO & SON, INC. (XNAS:JBSS)
Current Analyst Ratings
Strong buy�25%
Buy�13%
Hold�0%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Strong buy
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
966.54M
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
275.89M
690.65M
187.19M
212.51M
686.35M
473.84M
-
873.54M
1.37M
57.23M
117.88M
- 101320.00K
- 241674.00K
- 274982.00K
- 276427.00K
- 1445.00K
- 274982.00K
Statement of Cash Flow
Date:
Period:
34.42M
Differed Income Tax :
-
Stock Based Compensation :
24.42M
Change in Working Capital :
- 5639.00K
Accounts Receivables:
- 12012.00K
Other Working Capital:
29.61M
Other Non-Cash Items:
72.51M
Net Cash Provided by Operating Activities:
- 66.00K
Investments in PP&E:
- 1769.00K
Net Acquisitions:
4.96M
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
216.62M
-
216.62M
107.71M
-
104.43M
428.76M
124.72M
804.58M
624.41M
-
-
90.47M
1.64B
-
2.07B
59.52M
12.85M
-
121.22M
198.63M
392.22M
1.03B
639.00K
1.03B
-
1.42B
77.00K
- 983601.00K
- 8582.0K
1.65B
March 31, 2022 at 6:00:00 AM
1.15B
653.35M
2.07B
-
1.04B
821.3M
-
- 17487.00K
- 14296.00K
- 1903.00K
-
-
-
- 11.00K
- 1914.00K
- 36.00K
- 16312.00K
233.60M
249.91M
- 66.00K
- 19256.00K
- 19322.00K
Our Proprietary Portfolio Rating
Our Rating:
A+
Price Forecast/Expected Price in Next 5 Years of
TWOU
2023
2024
2025
2026
2027
$7.52
$8.04
$8.60
$9.20
$9.84