What Happened?
Shares of higher education company Strategic Education (NASDAQ:STRA) fell 17.6% in the afternoon session after the company reported weak fourth-quarter results, with domestic student numbers falling short of expectations. Revenue for the quarter grew modestly by 2.9% year-on-year, but operating income declined significantly compared to the same period last year. On the other hand, Strategic Education beat analysts' EPS and EBITDA expectations this quarter. Zooming out, we think this was a mixed yet weaker quarter.
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What The Market Is Telling Us
Strategic Education’s shares are not very volatile and have only had 5 moves greater than 5% over the last year. Moves this big are rare for Strategic Education and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 10 months ago when the stock gained 15.4% on the news that the company reported strong first-quarter 2024 results, which blew past analysts' EPS expectations. Its revenue and operating margin outperformed, driven by better-than-expected student enrollments across the globe and employer-affiliated enrollment in its education technology services segment. Strategic Education also announced a quarterly dividend of $0.60 per share that will be paid on June 3, 2024 to shareholders as of May 24, 2024. Zooming out, we think this was a great quarter that shareholders will appreciate.
Strategic Education is down 12.8% since the beginning of the year, and at $80.58 per share, it is trading 34.5% below its 52-week high of $123 from May 2024. Investors who bought $1,000 worth of Strategic Education’s shares 5 years ago would now be looking at an investment worth $551.09.
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