Enrollment And Occupancy DeteriorationDeclining enrollment, weaker occupancy and softer pricing expectations are pressuring revenue growth and increasing the likelihood of margin compression given a high fixed-cost base.
Fraud And Regulatory ScrutinyEvidence that subsidy funds may have gone to empty or inactive sites has led to funding freezes and heightened oversight, raising the risk of further government actions that could disrupt revenue.
Guidance Cuts And Delayed RecoveryReduced revenue and profitability guidance, paired with management's view that normal growth may not resume until fiscal year 2027, signal a prolonged recovery and greater uncertainty for near-term earnings.