What Happened?

Shares of vocational education Universal Technical Institute (NYSE: UTI) jumped 14.2% in the pre-market session after 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.

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What The Market Is Telling Us

Universal Technical Institute’s shares are quite volatile and have had 15 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.

Universal Technical Institute is up 17.4% since the beginning of the year, and at $29.84 per share, has set a new 52-week high. Investors who bought $1,000 worth of Universal Technical Institute’s shares 5 years ago would now be looking at an investment worth $3,807.

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