Sunlands Technology Group (NYSE:STG) stock plunged nearly 25% on Monday after investors focused on the online education provider’s weakening revenue outlook and sharp declines in student enrollment, overshadowing its latest profitable quarter and a newly announced $50 million share repurchase program.
Recently, the company forecast second-quarter 2026 revenue of between 410 million Chinese yuan and 430 million Chinese yuan, representing a year-over-year decline of 20.2% to 23.9%.
Enrollment And Billings Continue To Decline
The weak guidance added to concerns about Sunlands’ shrinking student base. New student enrollments fell to 102,127 in the first quarter of 2026 from 169,083 a year earlier, while gross billings declined to 304.8 million yuan from 412.3 million yuan.
The company reported first-quarter revenue of 440.7 million yuan, down 9.6% from the prior year. However, Sunlands remained profitable, posting net income of 76.8 million yuan and marking its 20th consecutive profitable quarter.
Investors appeared to focus on the continued top-line contraction rather than margin improvements driven in part by lower operating expenses, including a 19.5% reduction in sales and marketing costs.
Buyback And Asset Sale Fail To Sustain Rally
The sell-off comes just days after Sunlands announced a $50 million share buyback program and disclosed the sale of its entire stake in Guangzhou Shangzhi Side Technology Co. Ltd. for 126 million yuan in cash.
Those developments had fueled a sharp rally in the stock on May 29, making Monday’s plunge a swift reversal as investors shifted their focus back to the company’s weakening growth outlook and declining enrollment trends.
Long-Term Growth Concerns Persist
Monday’s decline suggests investors remain concerned about the long-term growth outlook for China’s adult online education market despite the company’s efforts to return capital to shareholders and streamline operations.
Sunlands Technology Group operates in China’s adult online education market and adult personal interest learning market through its online platforms.
STG Stock Price Activity: Sunlands Technology shares were down 24.59% at $4.63 at the time of publication on Monday, according to Benzinga Pro data.
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