Shares of KinderCare Learning Companies, Inc. (KLC) plummeted 16.29% in pre-market trading on Friday, as multiple Wall Street analysts significantly lowered their price targets for the early childhood education provider following its fourth-quarter earnings report.

The steep decline came after several major financial institutions, including JP Morgan, Morgan Stanley, and UBS, drastically cut their price targets for KLC stock. JP Morgan reduced its target from $31 to $24, while Morgan Stanley lowered its projection from $30 to $21. UBS also trimmed its target from $28 to $24.

These downward revisions appear to reflect growing concerns about KinderCare's growth prospects and valuation. During the company's earnings call, management provided guidance for 2025 that may have fallen short of analyst expectations. KinderCare forecasted revenue growth of 3% to 7% for the year, with adjusted EBITDA expected to increase by 4% to 9%.

Chief Financial Officer Anthony Amandi noted that the company expects occupancy rates to remain "relatively flat year-over-year" in 2025, which may have contributed to the analysts' more cautious outlook. Additionally, tuition increases are projected to be at the lower end of the company's long-term 3% to 5% growth target.

While KinderCare's management emphasized the company's strong market position and growth opportunities in early childhood education, investors appear to be recalibrating their expectations based on the latest guidance and analyst assessments. The stock's significant pre-market drop suggests that the market is quickly adjusting to this new information.

As trading opens for the day, it remains to be seen whether KinderCare can regain investor confidence or if the stock will face continued pressure in light of these revised price targets and tempered growth expectations.