Shares of K12 Inc. (LRN 2.51%), an online educational company that offers an alternative to traditional campus schooling, shed as much as 24% of their value Wednesday before recovering some of those losses after releasing mixed fiscal 2020 first-quarter results.
K12's top-line revenue growth increased 2.3%, to $257.1 million, compared to the prior-year result, which managed to top analysts' estimates calling for $253.9 million. The top-line growth didn't filter down to the bottom line: adjusted operating losses expanded to $13.9 million, compared to the prior-year's $9.7 million loss. K12's net loss per share checked in at $0.25, larger than the prior-year's loss of $0.22 per share and $0.06 per-share short of analysts' estimates.
Nate Davis, Chief Executive Officer and Chairman, said the following on the Oct. 22, 2019 conference call:
Specifically, on enrollment, our Managed Public School business grew to 122.3 thousand students. This is an increase of 3.5 thousand students or 2.9% year-over-year. Importantly, this marks the fourth year in a row that we have seen enrollment growth in our Managed Public School business.
K12's enrollment growth would have been even more impressive -- a 14,700 student increase instead of 3,500 increase -- had Georgia Cyber Academy not decided to work with new vendors after students in the academy performed below state averages.
While many will likely agree the educational system needs innovative solutions to improve and better meet the needs of students, investors seem unconvinced that K12 has its business figured out -- the stock is down 40% over the past six months. But stay tuned: The company has a pivotal year ahead as it tries to continue its enrollment growth streak and reverse operating losses.