What happened?

Shares of higher education company Strategic Education (NASDAQ: STRA) fell 17.1% in the afternoon session after the company reported a loss from operations for the third quarter ended September 30, 2026, impacted by a $134.1 million impairment charge related to Torrens University. According to the company's release, the charge is non-cash and reflects tighter limits on international students, which led the company to cut its near-term outlook for Torrens. Revenue was slightly higher than a year ago. Set aside that charge, operating profit was roughly steady. Adjusted earnings were $1.72 a share, below the $1.95 estimate. The company still declared its regular dividend.

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What is the market telling us

Strategic 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 Strategic Education and indicate this news significantly impacted the market’s perception of the business.

The biggest move we wrote about over the last year was 7 months ago when the stock dropped 13.3% on the news that the company reported disappointing first-quarter 2026 results that missed Wall Street's expectations for both revenue and profit. The higher education company's revenue of $305.9 million was flat year-on-year, falling short of analysts' projections. Its adjusted earnings per share of $1.42 and adjusted EBITDA of $62.15 million also came in below consensus expectations. While domestic student enrollment was in line with the same quarter last year, the lack of growth coupled with the missed financial targets signaled potential headwinds. Although the free cash flow margin improved significantly, it was not enough to offset the overall weak performance, leading to a negative investor reaction.

Strategic Education is down 20.3% since the beginning of the year, and at $61.64 per share, it is trading 29.6% below its 52-week high of $87.62 from July 2026. Investors who bought $1,000 worth of Strategic Education’s shares 5 years ago would now be looking at only $975.39.

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