What Happened?
Shares of vocational education company Adtalem Global Education (NYSE: ATGE) fell 28.3% in the afternoon session after the company reported third-quarter 2025 results that beat Wall Street estimates, but a weak forward-looking revenue forecast appeared to spook investors.
For the quarter, revenue grew 10.8% year-over-year to $462.3 million, and adjusted earnings per share was $1.75, both surpassing analyst projections. Adtalem also reiterated its full-year guidance for revenue and earnings. However, the market seemingly focused on the weaker outlook, as analysts project revenue growth will slow to 6.4% over the next 12 months, a significant deceleration. The combination of a soft forecast and the decision not to raise annual guidance, despite the quarterly outperformance, signaled potential challenges ahead, leading to a sharp sell-off in the stock.
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What Is The Market Telling Us
Adtalem’s shares are somewhat volatile and have had 11 moves greater than 5% over the last year. But moves this big are rare even for Adtalem and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 24 days ago when the stock dropped 3.9% 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.
Adtalem is up 6.9% since the beginning of the year, but at $99.14 per share, it is still trading 35.8% below its 52-week high of $154.45 from September 2025. Investors who bought $1,000 worth of Adtalem’s shares 5 years ago would now be looking at an investment worth $4,220.
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