Education Stocks Sell Off as Jobs, Variants Lure Students Away
(Bloomberg) -- A selloff is spreading across education stocks after Chegg Inc. warned that a hot job market and the pandemic will hurt enrollment more than expected.
Shares in the online education platform are having their worst session ever on Tuesday, falling as much as 49%. Fears that Chegg is an early sign of an industry-wide trend are weighing on peers in the Russell 3000 Education Services Index, which is down the most since March 2020.
“A combination of variants, increased employment opportunities and compensation, along with fatigue, have all led to significantly fewer enrollments than expected this semester,” CEO Dan Rosensweig said in a statement on Monday, as the company slashed its revenue forecast.
The slowdown could be happening more broadly across the education industry and might last into 2022, analysts warned on Tuesday. Peers swept into the selloff include 2U Inc., Grand Canyon Education Inc. and Adtalem Global Education Inc.
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