Shares of Strayer Education (STRA) plunged 10.09% in pre-market trading on Thursday after the for-profit education company reported fourth-quarter earnings for the period ended December 31, 2024.

While Strayer's Q4 revenue of $311.5 million and adjusted EPS of $1.27 were in line with analyst estimates, there were signs of increasing cost pressures weighing on profitability metrics.

The company's operating margin declined to 11.6% from 17.9% in the year-ago quarter, driven by higher instructional and support costs as well as general and administrative expenses. Free cash flow margin also deteriorated to 1.5% from 5.7% in Q4 2023, indicating challenges in converting revenue to cash profits.

Looking ahead, Strayer guided for fiscal 2025 revenue growth of around 5%, a slight deceleration from the prior two years. While revenue is still expected to expand, the company did not provide an outlook for earnings, raising concerns that margin pressures could persist.

Analysts highlighted that the lack of major positive catalysts or new growth initiatives in the Q4 report likely contributed to investors' disappointment, resulting in the sharp stock sell-off despite Strayer meeting top and bottom-line expectations.