What Happened?
Shares of vocational education Universal Technical Institute (NYSE:UTI) fell 14.3% in the morning session after the company issued a weak financial outlook for 2026, with its earnings guidance falling significantly short of analyst expectations.
The disappointing forecast overshadowed strong third-quarter 2025 results, in which both revenue and profit beat Wall Street estimates. However, for the upcoming 2026 financial year, the company guided for earnings per share (EPS) of $0.76 at the midpoint, which missed analyst estimates by 19.4%. The vocational education provider's EBITDA guidance of $116.5 million at the midpoint also came in below analysts' expectations. The weak outlook for future profitability appeared to be the primary concern for investors, outweighing the solid performance in the recent quarter.
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What Is The Market Telling Us
Universal Technical Institute’s shares are quite volatile and have had 19 moves greater than 5% over the last year. But moves this big are rare even for Universal Technical Institute and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 10 months ago when the stock gained 14.2% on the news that the company reported fourth-quarter results that significantly exceeded analysts' sales expectations. The top line was driven primarily by a 22.3% increase in new student starts and an 11.1% rise in average full-time active students. Additionally, EBITDA outperformed Wall Street estimates by a wide margin, reflecting strong operational performance. The slight rise in full-year revenue guidance is also a good sign, reflecting continued confidence in student enrollment trends. Zooming out, we think this quarter featured some important positives.
Universal Technical Institute is flat since the beginning of the year, and at $25.66 per share, it is trading 28.5% below its 52-week high of $35.90 from June 2025. Investors who bought $1,000 worth of Universal Technical Institute’s shares 5 years ago would now be looking at an investment worth $4,200.
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