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BREAKING:

HONDA TO SET UP $15B EV PRODUCTION BASE IN CANADA

Automaker to get up to $5B in government assistance for EV battery, assembly plants

2U (TWOU) Stock Jumps 17.4%: Will It Continue to Soar?

Zacks Equity Research
·2 min read

2U TWOU shares ended the last trading session 17.4% higher at $10.92. The jump came on an impressive volume with a higher-than-average number of shares changing hands in the session. This compares to the stock's 0.2% loss over the past four weeks.

The recent surge in the share price of 2U is due to a recent news that Indian virtual education conglomerate Byju’s has offered a buyout offer worth more than $1 billion or about $15 per share. Per Bloomberg, the offer presents a 61% premium to 2U’s closing price of $9.30 on the NASDAQ on Tuesday and gives 2U an enterprise value of about $2 billion.

This online education services provider is expected to post quarterly loss of $0.16 per share in its upcoming report, which represents a year-over-year change of -77.8%. Revenues are expected to be $255.39 million, up 7.7% from the year-ago quarter.

Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.

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For 2U, the consensus EPS estimate for the quarter has remained unchanged over the last 30 days. And a stock's price usually doesn't keep moving higher in the absence of any trend in earnings estimate revisions. So, make sure to keep an eye on TWOU going forward to see if this recent jump can turn into more strength down the road.

The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

2U is a member of the Zacks Internet - Software industry. One other stock in the same industry, Five9 FIVN, finished the last trading session 0.2% higher at $93.60. FIVN has returned -3.4% over the past month.

For Five9 , the consensus EPS estimate for the upcoming report has changed -0.6% over the past month to $0.18. This represents a change of -21.7% from what the company reported a year ago. Five9 currently has a Zacks Rank of #4 (Sell).


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Zacks Investment Research