What Happened?
Shares of higher education company Grand Canyon Education (NASDAQ: LOPE) jumped 2.8% in the afternoon session after the company announced a $300 million increase to its stock repurchase program. The expanded buyback program, which increased the total authorization to $2.545 billion, signaled management's confidence in the company's value.
After the initial pop the shares cooled down to $161.10, up 2.6% 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 4 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 about 1 month 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 flat since the beginning of the year, and at $161.10 per share, it is trading 27% 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 $1,718.
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