Short sellers moving on IDP Education (ASX:IEL) in recent history are probably feeling better than the company’s shareholders on Tuesday, as the company’s latest market update has seen the stock plunge -40%.
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At around midday trade on Tuesday, stocks were down -40.96% to $4.41/sh. That brings 1Y returns further down to -72%.
The culprit today for IDP is a further set of macro headwinds ultimately hurting foreign student numbers both at home and, following the release of a fresh white paper, now the UK poses concerns for IDP’s fundamental business model, too.
(Enrolling foreign students is, in a sentence, IDP’s bread and butter.)
“In FY25, IDP’s Student Placement volumes are now expected to decrease by… 28% to 30%, and IDP’s Language Testing volumes are now expected to decrease by 18% to 20% compared to FY24,” the company wrote.
“The impact on revenue will be partially mitigated by continued strong average fee growth.”
Clearly, not mitigated enough. Overall, EBIT is now forecast to hit $115 million to $125 million. The fact that shares sold off -40% gives you an idea of how the market felt about that one.
I say shorters are probably in a better mood, because at the time of writing, short sale data on IDP shows it’s the sixth most shorted stock on the ASX. (About a year ago, at one point, this finance journalist recalls the stock was briefly #1 most shorted.)
For now, the company’s market cap remains around A$1.2B. So, there’s that. But in between the lines, IDP clearly doesn’t see any light on the horizon.
“With policy uncertainty expected to continue into FY26 as well as the anticipated impact of FY25 enrolment pipeline on FY26 volumes, the business is completing a detailed review of longer-term cost, productivity, investment and commercial levers.”
IEL last traded at $4.41/sh.
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