2U Inc (TWOU)

2U Inc (TWOU) stock declined by 59.33% due to the release of its fourth-quarter results. These results disappointed investors as thye fell short of estimates. Besides, a change in leadership contributed to the stock's decline.

• Q4 results: Revenue fell below analysts' expectations, particularly in its Degree Program and Alternative Credentials segments. The company attributed this to lower enrollments in its coding boot camp offerings, indicating a specific area of struggle. Additionally, its full-year 2024 revenue and EBITDA guidance were below expectations, signaling a potential slowdown in demand.
• Leadership Changes and Investor Response: In response to the performance, 2U made leadership changes, appointing Andrew Hermalyn as President of the Degree Program segment and Aaron McCullough as President of the Alternative Credential segment. However, Needham downgraded the stock's rating from Buy to Hold, expressing concerns over the company's ability to manage its substantial debt obligations given its recent performance. This downgrade reflects worries that high debt levels combined with performance declines could lead to potential bankruptcy if not addressed.