These stocks are a way to ride the accelerating online education trend due to the coronavirus

Published Fri, Aug 7 202010:09 AM EDT

(This story is for CNBC Pro subscribers only.) The Covid-19 era is causing a paradigm shift in traditional learning and a few education technology companies could be major winners of the remote learning boom. U.S. education technology startups have raised more than $1 billion between January and July 2020, a 220% increase from last year's funding, according to Venture Intelligence. "Lock downs, social distancing, and remote learning in response to the COVID-19 pandemic are accelerating the adoption of educational technology in a range of areas," Berenberg Capital Markets analyst Brett Knoblauch told clients. The coronavirus crisis has caused unprecedented financial and societal disruption from the government mandated shutdown to restrictive reopening guidelines. Resuming in-person classes for students remains a complicated decision that requires economists, health officials, federal, state and local governments to work together to find a solution. Many schools have already declared they will be resuming with online classes only amid an uptick in Covid-19 cases nationally. Berenberg Capital Markets said the rise in remote learning should benefit education technology companies 2U , Chegg and Pluralsight as September creeps up. "We believe that their incumbent positions in growing markets leaves them well positioned to benefit from tailwinds created by the pandemic," added Knoblauch. Buy-rated 2U works with universities, like Harvard University and Syracuse University, to launch online degree programs for the school. Knoblauch said 2U's existing programs have seen record enrollments as students who are considering a graduate degree program effectively have just one option: online. "We expect this dynamic to result in revenue growth acceleration for the remainder of 2020 and into 2021," said Knoblauch. Berenberg Capital Markets increased its target price on 2U to $65 per share form $42 per share on Friday. Shares of 2U are up more than 76% in 2020. The firm also likes online textbook company Chegg. In the second quarter, Chegg delivered a record quarter in terms of subscriber growth as it has benefited from the induced remote learning tailwind. "Given our expectation that the pandemic's impact on higher education will persists into 2021, we believe the remote learning tailwind will continue to support strong subscriber growth for Chegg over the medium-term as it has limited competitive pressures," said Knoblauch. Berenberg Capital Markets has a buy rating on Chegg and hiked its 12-month price target to $95 per share from $64 per share on Friday. Shares of Chegg have rallied nearly 125% this year. Finally, the firm likes buy-rated e-learning platform Pluralsight. The company works with enterprises to create learning platforms for their employees. The service has analytical features which allow managers to know about employees' strengths and weakness. "While the pandemic will not induce a short-term tailwind as we expect it will with Chegg and 2U, we believe Pluralsight's focus on cost combined with a cyclical tailwind once budgetary pressures dissipate will create a favorable revenue growth and profitability improvement profile for Pluralsight," said Knoblauch. Berenberg hiked Pluralsight's 12-month price target to $27 per share from $18 per share on Friday. — with reporting from CNBC's Michael Bloom.

James Tahaney loads textbooks on to a pallet in preparation for shipping at the Chegg warehouse in Shepherdsville, Kentucky, on April 29, 2010.

John Sommers II | Bloomberg | Getty Images

(This story is for CNBC Pro subscribers only.)

The Covid-19 era is causing a paradigm shift in traditional learning and a few education technology companies could be major winners of the remote learning boom.

U.S. education technology startups have raised more than $1 billion between January and July 2020, a 220% increase from last year's funding, according to Venture Intelligence.

"Lock downs, social distancing, and remote learning in response to the COVID-19 pandemic are accelerating the adoption of educational technology in a range of areas," Berenberg Capital Markets analyst Brett Knoblauch told clients.