Sometimes teachers will just say whatever fits with the results of your child's test.
In our experience with STARS reading, the scores jumped up and down over 4 grade levels within one school year. During parent night we were told that STARS is pretty accurate but later when DD11 (7 at the time)came back with above average scores we were told how inaccurate STARS was.
I would ignore STARS but make sure your child is allowed to read "just right" books in class even if their "just right" is much higher than other kids.
Wendy