It's not a good day to be a Phoenix -- the slogan used by Apollo Group's University of Phoenix.
Late Tuesday, Apollo (APOL), the biggest for-profit education provider, reported revenue that fell short of forecasts as enrollment at the University of Phoenix shrank. And the company also cut its guidance.
To make matters even worse, University of Phoenix said Wednesday that it plans to close 115 locations and 25 campuses. That will impact about 4%, or 13,000, of students enrolled in degree programs.
Shares of Apollo plunged 19%, dragging other education stocks down. Strayer Education (STRA), ITT Education Services (ESI), Corinthian Colleges (COCO), Capella Education (CPLA) and DeVry (DV) skidded between 4% and 7% lower.
And it's clearly a sector not loved by StockTwits traders.
Perhaps free courses will keep pressure on these companies but maybe they just need to retool. Not everything for-profit is evil.
That's a fair point. It can't have come as a big surprise that enrollment was flagging. Of course, there are ebbs and flows in every industry so maybe this is just the storm before the calm.
Not a member yet?Sign up now for a free account
|Consumer Reports: We can't recommend Tesla's Model 3|
|Trouble in Big Food: America's cereal, soda and soup companies are in turmoil|
|Obamas will be on and off camera in unique Netflix deal|
|It's not just you: Everything really is getting more expensive|
|Red Hydrogen One: Holographic phone coming to AT&T, Verizon|