What Happened?
Shares of higher education company Laureate Education (NASDAQ:LAUR) fell 5.4% in the afternoon session after the company reported mixed third-quarter results, where a significant earnings miss and a sharp drop in net income overshadowed a revenue beat and an expanded share buyback plan.
Laureate's earnings per share came in at $0.23, falling 30.3% short of the forecasted $0.33. While revenue grew 9% from the previous year to $400.2 million, surpassing expectations, the company's profitability declined. Net income dropped to $34.4 million from $85.3 million in the same period a year ago. This decrease was mainly due to unfavorable foreign currency exchange rates and the absence of a one-time tax benefit that was recorded in the prior year. In a move to reassure investors, the company's board authorized an additional $150 million for its share repurchase program. However, this news was not enough to offset concerns about the company's falling profits.
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 Laureate Education? Access our full analysis report here.
What Is The Market Telling Us
Laureate 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 previous big move we wrote about was 1 day ago when the stock gained 10.7% on the news that the company reported third-quarter financial results that featured a revenue beat and an increased full-year forecast. Although its earnings per share did not meet Wall Street's expectations, investors focused on the positives. Revenue for the quarter reached $400.2 million, an 8.6% increase from the previous year that surpassed analyst estimates. Looking ahead, Laureate Education raised its guidance for both full-year revenue and adjusted EBITDA, a measure of profitability, signaling confidence in its future performance. The combination of a strong sales beat and a better-than-expected outlook appeared to outweigh the earnings shortfall in the eyes of the market.
Laureate Education is up 64.1% since the beginning of the year, and at $29.78 per share, it is trading close to its 52-week high of $31.79 from October 2025. Investors who bought $1,000 worth of Laureate Education’s shares 5 years ago would now be looking at an investment worth $2,279.
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