What Happened:
Shares of education company Lincoln Educational (NASDAQ:LINC) jumped 12.1% in the afternoon session after the company reported a "beat and raise quarter. " Lincoln Educational blew past analysts' revenue, operating margin, and EPS expectations this quarter. These beats were driven by more new students than anticipated, and management noted it's seeing stronger demand as the "American public is increasingly questioning the costs and value of a traditional four-year college degree". Given the favorable conditions, management raised its revenue, EBITDA, and adjusted EPS estimates, which beat Wall Street's estimates. Zooming out, we think this was a great quarter that shareholders will appreciate.
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What is the market telling us:
Lincoln Educational's shares are somewhat volatile and over the last year have had 13 moves greater than 5%. But moves this big are very rare even for Lincoln Educational and that is indicating to us that this news had a significant impact on the market's perception of the business.
Lincoln Educational is up 24.7% since the beginning of the year. Investors who bought $1,000 worth of Lincoln Educational's shares 5 years ago would now be looking at an investment worth $3,984.
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