Why 2U, Inc. Stock Soared 114% in 2017

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What happened

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Shares of 2U Inc. (NASDAQ: TWOU) climbed 114% in 2017, according to data from S&P Global Market Intelligence, as the online education platform leader delivered several better-than-expected quarters, made a big acquisition, and repeatedly accelerated its program launch schedule.

To be sure, 2U's steady rise last year kicked off in earnest when it announced strong fourth-quarter 2016 results in late February, with revenue climbing by nearly a third, and the company capping its first-ever year of positive adjusted EBITDA.

At the time, CEO Chip Paucek noted that 2U had already announced a full slate of 10 new domestic graduate program (DGP) launches in 2017 -- one higher than it had initially promised -- while targeting at least 12 new programs in 2018.

So what

However, by the time 2U revealed even more impressive first-quarter 2017 results in May -- with revenue climbing almost 37% year over year to $64.8 million -- Paucek noted that the company had built "a sizable, and increasing, number of domestic graduate programs operating at positive margins." That allowed 2U to dedicate more of its resources toward accelerating its program launch cadence and increasing its 2018 DGP launch target to 13.

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If that wasn't enough, 2U also announced it had agreed to acquire premium online short course specialist GetSmarter for $103 million, expanding its business to non-degree alternatives and -- with GetSmarter's partners including the likes of MIT, Cambridge, and Oxford University -- accelerating its international presence.

Now what

For perspective, 2U currently has 49 announced domestic graduate programs with 23 different universities -- a list that last quarter alone grew to include new programs from the likes of the University of Southern California, Syracuse University, UC Berkeley, Rice University, and UC Davis.

So perhaps it should be no surprise that in November, 2U's third-quarter results not only exceeded its guidance yet again, but the company also increased its 2018 DGP launch goal to 14 due to university demand. As such, 2U expects year-over-year revenue growth to accelerate to a range of 38% to 39% in 2018.

Looking further ahead, 2U is now targeting 16 DGPs for launch along with its first international graduate program in 2019.

With 2U enjoying immense stateside momentum and on the cusp of expanding its graduate programs to international markets, it was hard to blame the market for so aggressively bidding up its shares in 2017. If 2U continues its habit of underpromising and overdelivering, it should be poised for another great year in 2018.

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Steve Symington has no position in any of the stocks mentioned. The Motley Fool recommends 2U. The Motley Fool has a disclosure policy.