2U, Inc. (NASDAQ:TWOU) shares dropped 48% Thursday afternoon following the company’s disappointing Q4 results and worse-than-expected 2022 guidance.

Analysts at Berenberg Bank downgraded the company to hold from buy, lowering their price target to $17 from $40. While the analysts are positive on the business longer term, they move to the sidelines due to disappointing 2022 guidance, weak enrollment data, lack of catalysts ahead, and management’s commentary that the business will not be cash flow positive until the back half of 2023.

Below are the main points highlighted by the company’s management during the earnings call:

(1) The launch cadence in 2022 is weaker than expected as some programs are delayed until 2023.

(2) The AC segment enrollment trends continue to be burdened by elevated costs per lead.

(3) The company will not be profitable on an unlevered FCF basis until the second half of 2023.

(4) The business is expected to grow at around 12% CAGR until 2025.