2U: Declining Enrollments Could Threaten Profitability Plans


  • Shares of 2U, the online education company, are up 40% year to date.
  • The stock rallied after the company released rosy profitability plans for 2023.
  • 2U is primarily achieving this through driving down sales and marketing costs. As a reminder, 2U shoulders the brunt of marketing its degree programs to prospective students.
  • Enrollments are already down and will continue to suffer with lower marketing.
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The early 2023 rally has come under fire in recent weeks, but broadly speaking most technology stocks are still up tremendously year to date. We should be careful, however, not to assume that a rising tide will lift all boats: as there are plenty of

Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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