Needham downgrades 2U on balance sheet uncertainty

Needham analyst Ryan MacDonald downgraded 2U to Hold from Buy without a price target. The company’s below-consensus Q4 results and “weak” fiscal 2024 guidance causes further questions around 2U’s ability to refinance its “hefty” debt load, the analyst tells investors in a research note. While 2U has taken a number of steps over the past two quarters to shore up the balance sheet, it has not yet been able to relieve the pressure via a debt refinancing, the analyst tells investors in a research note. Needham says that without any quantification or timeframe for incremental savings to be generated, it is tapping to the sidelines pending a clearer path to business and financial stability.