What Happened?

Shares of higher education company Laureate Education (NASDAQ: LAUR) jumped 10.7% in the morning session after 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.

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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. Moves this big are rare for Laureate Education and indicate this news significantly impacted the market’s perception of the business.

The previous big move we wrote about was 23 days ago when the stock dropped 3.1% 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.

Laureate Education is up 76.2% since the beginning of the year, and at $31.97 per share, has set a new 52-week high. Investors who bought $1,000 worth of Laureate Education’s shares 5 years ago would now be looking at an investment worth $2,459.

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