As of October 18, 2025, 2U Inc has a Discounted Cash Flow (DCF) derived fair value of $0.00 per share. With the current market price at $1.58, this represents a potential upside of -646228.3%.
| Key Metrics | Value |
|---|---|
| DCF Fair Value (5-year) | $0.00 |
| DCF Fair Value (10-year) | $0.00 |
| Potential Upside (5-year) | -622865.9% |
| Potential Upside (10-year) | -646228.3% |
| Discount Rate (WACC) | 6.6% - 10.1% |
Revenue is projected to grow from $946 million in 12-2023 to $1748 million by 12-2033, representing a compound annual growth rate of approximately 6.3%.
| Fiscal Year | Revenue (USD millions) | Growth |
|---|---|---|
| 12-2023 | 946 | 2% |
| 12-2024 | 807 | -15% |
| 12-2025 | 883 | 9% |
| 12-2026 | 960 | 9% |
| 12-2027 | 1047 | 9% |
| 12-2028 | 1130 | 8% |
| 12-2029 | 1238 | 10% |
| 12-2030 | 1345 | 9% |
| 12-2031 | 1464 | 9% |
| 12-2032 | 1602 | 9% |
| 12-2033 | 1748 | 9% |
Net profit margin is expected to improve from -34% in 12-2023 to -21% by 12-2033, driven by operational efficiency and economies of scale.
| Fiscal Year | Net Profit (USD millions) | Profit Margin |
|---|---|---|
| 12-2023 | (318) | -34% |
| 12-2024 | (250) | -31% |
| 12-2025 | (254) | -29% |
| 12-2026 | (256) | -27% |
| 12-2027 | (259) | -25% |
| 12-2028 | (259) | -23% |
| 12-2029 | (279) | -23% |
| 12-2030 | (298) | -22% |
| 12-2031 | (320) | -22% |
| 12-2032 | (344) | -21% |
| 12-2033 | (370) | -21% |
with a 5-year average of $68 million. Projected CapEx is expected to maintain at approximately 9% of revenue.
Depreciation is based on an average useful life of 5 years for capital assets.
| Fiscal Year | D&A (USD millions) |
|---|---|
| 12-2024 | 67 |
| 12-2025 | 68 |
| 12-2026 | 70 |
| 12-2027 | 74 |
| 12-2028 | 83 |
| 12-2029 | 90 |
Net working capital is expected to increase gradually, with projected changes affecting free cash flow.
| Components | Average Days |
|---|---|
| Days Receivables | 32 |
| Days Inventory | 0 |
| Days Payables | 0 |
| Fiscal Year | EBITDA | Tax | CapEx | Change in NWC | FCF |
|---|---|---|---|---|---|
| 9M/2024 | (91) | (1) | 52 | (35) | (108) |
| 2025 | (119) | (2) | 76 | 11 | (204) |
| 2026 | (113) | (2) | 83 | 15 | (209) |
| 2027 | (106) | (2) | 90 | 1 | (195) |
| 2028 | (89) | (2) | 97 | 10 | (195) |
| Valuation Method | Fair Price (USD) | Potential Upside |
|---|---|---|
| 5-Year DCF (Growth) | 0.00 | -622865.9% |
| 10-Year DCF (Growth) | 0.00 | -646228.3% |
| 5-Year DCF (EBITDA) | 0.00 | -100.0% |
| 10-Year DCF (EBITDA) | 0.00 | -100.0% |
Is 2U Inc (TWOU) a buy or a sell? 2U Inc is definitely a sell. Based on our DCF analysis, 2U Inc (TWOU) appears to be overvalued with upside potential of -646228.3%. The company's strong projected growth in revenue and profitability, coupled with consistent capital expenditure, supports our positive outlook on its intrinsic value.
Key investment drivers include:
Investors should consider reducing exposure at the current market price of $1.58.