What Happened?
Shares of higher education company Grand Canyon Education (NASDAQ:LOPE) fell 5.3% in the afternoon session after the company announced it would pay $35 million to settle a lawsuit concerning its compensation practices.
The settlement was part of a larger update on several legal matters. While some outcomes were positive, investors seemed to focus on the settlement's cost. In other developments, the Federal Trade Commission (FTC) dismissed its case against the company. Separately, the Department of Education (ED) reversed a $37.7 million fine related to claims that the company had misrepresented the costs of its doctoral programs. Despite this news, the stock's fall suggested that the financial impact of the $35 million payment, which is pending court approval, was the primary concern for the market.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Grand Canyon Education? Access our full analysis report here.
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 previous big move we wrote about was 24 days ago when the stock dropped 3.8% on the news that a confluence of negative economic data pointed to a weak economy. The latest Survey of Consumer Expectations from the New York Fed revealed that households' short-term inflation expectations rose, while their outlook on the labor market deteriorated. Consumers expressed greater concern about potential job losses and expected lower earnings growth, factors that directly impact discretionary spending. Adding to the unease, Chief Economist at Moody’s Analytics, Mark Zandi, warned that 22 states demonstrated clear signs of a recession, placing the broader U.S. economy in a precarious position. The U.S. government shutdown further dampened sentiment, threatening to weigh on incomes and purchasing power.
Grand Canyon Education is up 17.6% since the beginning of the year, but at $190.31 per share, it is still trading 13.7% 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 $2,451.
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