2U Inc (TWOU) Stock Fundamental Analysis
NASDAQ:TWOU - Nasdaq - US90214J2006 - Common Stock - Currency: USD
Taking everything into account, TWOU scores 2 out of 10 in our fundamental rating. TWOU was compared to 71 industry peers in the Diversified Consumer Services industry. TWOU has a bad profitability rating. Also its financial health evaluation is rather negative. TWOU does not seem to be growing, but still is valued expensively.
1. Profitability
1.1 Basic Checks
In the past year TWOU was profitable.
TWOU had a positive operating cash flow in the past year.
TWOU had negative earnings in each of the past 5 years.
The reported operating cash flow has been mixed in the past 5 years: TWOU reported negative operating cash flow in multiple years.
1.2 Ratios
TWOU's Return On Assets of -22.21% is on the low side compared to the rest of the industry. TWOU is outperformed by 67.69% of its industry peers.
TWOU's Return On Equity of -188.75% is on the low side compared to the rest of the industry. TWOU is outperformed by 78.46% of its industry peers.
With a Return On Invested Capital value of 0.01%, TWOU perfoms like the industry average, outperforming 52.31% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -22.21% | ||
| ROE | -188.75% | ||
| ROIC | 0.01% |
ROA(3y)-16.26%
ROA(5y)-16.52%
ROE(3y)-77.58%
ROE(5y)-57.76%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
The Operating Margin of TWOU (0.01%) is comparable to the rest of the industry.
With a decent Gross Margin value of 54.64%, TWOU is doing good in the industry, outperforming 63.08% of the companies in the same industry.
TWOU's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 0.01% | ||
| PM (TTM) | N/A | ||
| GM | 54.64% |
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y2.9%
GM growth 5Y-2.84%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so TWOU is destroying value.
Compared to 1 year ago, TWOU has less shares outstanding
TWOU has less shares outstanding than it did 5 years ago.
TWOU has a worse debt/assets ratio than last year.
2.2 Solvency
TWOU has an Altman-Z score of -0.90. This is a bad value and indicates that TWOU is not financially healthy and even has some risk of bankruptcy.
The Altman-Z score of TWOU (-0.90) is worse than 70.77% of its industry peers.
TWOU has a Debt/Equity ratio of 5.33. This is a high value indicating a heavy dependency on external financing.
TWOU has a worse Debt to Equity ratio (5.33) than 84.62% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 5.33 | ||
| Debt/FCF | N/A | ||
| Altman-Z | -0.9 |
ROIC/WACC0
WACC5.35%
2.3 Liquidity
TWOU has a Current Ratio of 0.91. This is a bad value and indicates that TWOU is not financially healthy enough and could expect problems in meeting its short term obligations.
The Current ratio of TWOU (0.91) is worse than 66.15% of its industry peers.
A Quick Ratio of 0.91 indicates that TWOU may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.91, TWOU is doing worse than 66.15% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.91 | ||
| Quick Ratio | 0.91 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 37450.00% over the past year.
The Revenue has decreased by -4.47% in the past year.
Measured over the past years, TWOU shows a quite strong growth in Revenue. The Revenue has been growing by 18.10% on average per year.
EPS 1Y (TTM)37450%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%-6500%
Revenue 1Y (TTM)-4.47%
Revenue growth 3Y6.89%
Revenue growth 5Y18.1%
Sales Q2Q%-16.82%
3.2 Future
The Earnings Per Share is expected to decrease by -26.83% on average over the next years. This is quite bad
TWOU is expected to show a decrease in Revenue. In the coming years, the Revenue will decrease by -0.04% yearly.
EPS Next Y-55.1%
EPS Next 2Y-42.67%
EPS Next 3Y-26.83%
EPS Next 5YN/A
Revenue Next Year-16.63%
Revenue Next 2Y-4.79%
Revenue Next 3Y-0.04%
Revenue Next 5YN/A
3.3 Evolution
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 0.21, the valuation of TWOU can be described as very cheap.
98.46% of the companies in the same industry are more expensive than TWOU, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 29.63, TWOU is valued rather cheaply.
The Forward Price/Earnings Ratio is negative for TWOU. No positive earnings are expected for the next year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 0.21 | ||
| Fwd PE | N/A |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, TWOU is valued cheaper than 83.08% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 7.07 |
4.3 Compensation for Growth
A cheap valuation may be justified as TWOU's earnings are expected to decrease with -26.83% in the coming years.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-42.67%
EPS Next 3Y-26.83%
5. Dividend
5.1 Amount
TWOU does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
1.58
-0.86 (-35.25%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryDiversified Consumer Services
Earnings (Last)
Earnings (Next)
Inst Owners223.4%
Inst Owner Change-2.75%
Ins Owners315.07%
Ins Owner Change0%
Market Cap4.44M
Analysts47.5
Price Target21.42 (1255.7%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)5.46%
Min EPS beat(2)-26.16%
Max EPS beat(2)37.09%
EPS beat(4)1
Avg EPS beat(4)-34.9%
Min EPS beat(4)-139.54%
Max EPS beat(4)37.09%
EPS beat(8)3
Avg EPS beat(8)-26.22%
EPS beat(12)7
Avg EPS beat(12)-10.33%
EPS beat(16)11
Avg EPS beat(16)-1.06%
Revenue beat(2)0
Avg Revenue beat(2)-5.89%
Min Revenue beat(2)-10.94%
Max Revenue beat(2)-0.85%
Revenue beat(4)1
Avg Revenue beat(4)-4.57%
Min Revenue beat(4)-10.94%
Max Revenue beat(4)0.52%
Revenue beat(8)1
Avg Revenue beat(8)-3.85%
Revenue beat(12)1
Avg Revenue beat(12)-3.05%
Revenue beat(16)5
Avg Revenue beat(16)-1.51%
PT rev (1m)0%
PT rev (3m)2300%
EPS NQ rev (1m)12.18%
EPS NQ rev (3m)-4707.57%
EPS NY rev (1m)33523.9%
EPS NY rev (3m)2746.3%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-2.29%
Revenue NY rev (1m)0.2%
Revenue NY rev (3m)0.23%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 0.21 | ||
| Fwd PE | N/A | ||
| P/S | 0 | ||
| P/FCF | N/A | ||
| P/OCF | 0.11 | ||
| P/B | 0.03 | ||
| P/tB | N/A | ||
| EV/EBITDA | 7.07 |
EPS(TTM)7.47
EY472.78%
EPS(NY)-0.5
Fwd EYN/A
FCF(TTM)-1.49
FCFYN/A
OCF(TTM)14.71
OCFY931.08%
SpS322.36
BVpS59.99
TBVpS-298.4
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | -22.21% | ||
| ROE | -188.75% | ||
| ROCE | 0.01% | ||
| ROIC | 0.01% | ||
| ROICexc | 0.01% | ||
| ROICexgc | 0.64% | ||
| OM | 0.01% | ||
| PM (TTM) | N/A | ||
| GM | 54.64% | ||
| FCFM | N/A |
ROA(3y)-16.26%
ROA(5y)-16.52%
ROE(3y)-77.58%
ROE(5y)-57.76%
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5YN/A
ROICexc growth 3YN/A
ROICexc growth 5YN/A
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y2.9%
GM growth 5Y-2.84%
F-Score5
Asset Turnover0.63
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 5.33 | ||
| Debt/FCF | N/A | ||
| Debt/EBITDA | 8.16 | ||
| Cap/Depr | 41.4% | ||
| Cap/Sales | 5.03% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 37.54% | ||
| Profit Quality | N/A | ||
| Current Ratio | 0.91 | ||
| Quick Ratio | 0.91 | ||
| Altman-Z | -0.9 |
F-Score5
WACC5.35%
ROIC/WACC0
Cap/Depr(3y)55.38%
Cap/Depr(5y)70.03%
Cap/Sales(3y)6.81%
Cap/Sales(5y)8.6%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)37450%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%-6500%
EPS Next Y-55.1%
EPS Next 2Y-42.67%
EPS Next 3Y-26.83%
EPS Next 5YN/A
Revenue 1Y (TTM)-4.47%
Revenue growth 3Y6.89%
Revenue growth 5Y18.1%
Sales Q2Q%-16.82%
Revenue Next Year-16.63%
Revenue Next 2Y-4.79%
Revenue Next 3Y-0.04%
Revenue Next 5YN/A
EBIT growth 1Y100.26%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year35.34%
EBIT Next 3Y18.37%
EBIT Next 5YN/A
FCF growth 1Y95.82%
FCF growth 3YN/A
FCF growth 5YN/A
OCF growth 1Y260.41%
OCF growth 3YN/A
OCF growth 5YN/A