In a report released today, Simeon Siegel from BMO Capital maintained a Buy rating on Stride (LRN – Research Report), with a price target of $139.00.
Simeon Siegel has given his Buy rating due to a combination of factors that highlight Stride’s strong positioning in the education sector. The company’s recent pullback in stock price, influenced by government funding concerns, presents a buying opportunity as these fears are largely unfounded. Siegel notes that Stride’s enrollment growth is driven by increased parent interest in school choice, mental health considerations, and dissatisfaction with traditional schooling, which are expected to persist.
Additionally, Stride’s Career Learning programs are gaining traction, offering students diverse pathways beyond traditional vocational education. The company’s minimal reliance on federal funding, with most revenue coming from state and local sources, provides stability. Furthermore, Stride’s business model is well-positioned to withstand economic downturns, as state education funding is typically resilient, and there may be an increase in enrollment during recessions as parents seek cost-effective schooling options.