What Happened?
Shares of higher education company Grand Canyon Education (NASDAQ: LOPE) jumped 3.4% in the morning session after the company reported strong fourth-quarter 2025 earnings, solid enrollment growth, and provided an upbeat financial forecast.
The higher education company met Wall Street's revenue expectations for the quarter, with sales climbing 5.3% year over year to $308.1 million. Its profit of $3.14 per share was in line with analysts' estimates. The positive results were supported by strong student numbers, as online enrollment rose 8.7% and hybrid enrollment surged 16.6%. Looking ahead, Grand Canyon Education projected that its revenue for the next quarter would be about 7.9% higher than analysts had predicted. Furthermore, its earnings per share guidance for the 2026 financial year was 2% above market expectations. The company also showed confidence by buying back its own stock, having repurchased 605,730 shares in the fourth quarter and an additional 352,051 shares after the year ended.
After the initial pop the shares cooled down to $158.37, up 2.4% from previous close.
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What Is The Market Telling Us
Grand Canyon Education’s shares are not very volatile and have only had 7 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 4 months ago when the stock dropped 9% on the news that the company's third-quarter results revealed a significant decline in profit, largely due to a $35 million reserve set aside for a litigation settlement. While revenue grew 9.6% year on year to $261.1 million, boosted by a 3.5% increase in student enrollments, the top-line growth was completely overshadowed by plummeting profitability. The company's operating income fell 62.6%, and net income declined by nearly 60% from the prior year. The profit of $0.58 per share was a major disappointment, missing analysts' estimates by over 66%. Adding to investor concerns, Grand Canyon's full-year earnings guidance also fell short of Wall Street's expectations.
Grand Canyon Education is down 4.2% since the beginning of the year, and at $158.37 per share, it is trading 28.2% below its 52-week high of $220.55 from October 2025. Investors who bought $1,000 worth of Grand Canyon Education’s shares 5 years ago would now be looking at an investment worth $1,467.
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