Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of K12 (NYSE:LRN) dropped 13% Thursday despite the online education specialist's better-than-expected fiscal first quarter 2015 results.

So what: Quarterly revenue climbed roughly 3.6% to $236.7 million, and a net loss of $0.18 per diluted share. For perspective, K12's operating loss for quarter came in at $13.2 million, while capital expenditures were $18.6 million. Analysts, on average, were expecting a wider net loss of $0.20 per share on lower sales of $234 million.

For the current quarter, K12 sees revenue in the range of $225 million to $235 million, operating income in the range of $14 million to $20 million, and capital expenditures of $18 million to $22 million. Analysts were looking for fiscal second-quarter revenue and earnings of $227.92 million and $0.30 per share, respectively.

But as fellow Fool Brian Stoffel pointed out a few days ago, it all comes down to enrollments. To be sure, expanded embrace by schools of virtual instruction has created headwinds for K12's managed programs, enrollment for which fell 4.7% year-over-year to 118,609. Meanwhile, non-managed programs enrollment climbed 39.2% to 20,630, which meant overall enrollment dipped slightly from the same year-go period to 139,239. 

Now what: To be fair, that's in line with the guidance K12 provided earlier this month, but declining enrollments are not what investors want to see. Keeping in mind shares had climbed 16% over the two weeks leading up to this report (were investors hoping for better news today?), note today's drop brings the stock almost exactly to where it stood a few days after that guidance was issued. For now, if K12 wants to win over the market, it needs to prove its business model is sustainable over the long-term as those managed enrollment headwinds remain.