2u (TWOU) shares plunged Tuesday after missing fourth-quarter earnings and revenue consensus estimates. First-quarter and full-year guidance also disappointed.
The stock is down more than 24% at the time of writing.
The online education platform company reported Q4 EPS of $0.48, $0.16 worse than the analyst estimate of $0.64. Revenue for the quarter rose 8% year-on-year, coming in at $255.7 million versus the consensus estimate of $276.71 million.
Degree program segment revenue increased 19% to $163.5 million.
"We are resetting and enhancing our operations with renewed financial discipline," said Paul Lalljie, CEO of 2U (NASDAQ:TWOU). "Looking ahead, we believe this renewed focus, along with our market-proven offerings, robust partner network, and scalable technology and services, will allow us to take advantage of increasing demand for high-quality online education and continue to deliver on our mission."
The company sees Q1 2024 revenue from $195 million to $198 million, versus the consensus of $208.4 million, while full-year 2024 revenue is seen between $805 million and $815 million, versus the consensus of $871.1 million.
Reacting to the report, analysts at Needham & Company noted 2U's weak outlook and continued balance sheet uncertainty. They downgraded the stock to Hold from Buy and removed the price target.
"We are downgrading 2U (TWOU) to Hold following the company's below-consensus 4Q23 results and weak FY24 guide that causes us to further question 2U's ability to refinance its hefty debt load," analysts wrote.
"With initial FY24 EBITDA guidance below our expectations, 2U is working to drive incremental cost savings through another restructuring," they added. "Without any quantification or timeframe for incremental savings to be generated, we are stepping to the sidelines until we can see a clearer path to business and financial stability."