Stride Beats Q3 Expectations; Shares Rise 5.6%

Stride Inc. (NYSE: LRN) reported stronger-than-expected fiscal Q3 results, topping both earnings and revenue estimates driven by robust performance across all segments.

Shares of the technology-based educational company and a premier provider of K-12 education for students, schools, and districts, including career learning services through middle and high school curriculum, gained 5.6% during the extended trading session on April 19.

Q3 Beat

Markedly, adjusted earnings of $1.02 per share surged 78.9% year-over-year and significantly beat analysts’ expectations of $0.84 per share. The company reported earnings of $0.57 per share for the prior-year period.

Furthermore, revenues jumped 7.5% year-over-year to $421.7 million and exceeded consensus estimates of $411.12 billion.

The increase in revenues reflects robust enrolment trends and increases in revenue per enrollment, as well as continued growth in Adult Learning.

Meanwhile, adjusted operating income grew 5.3% to $69.4 million during the quarter.

Raised FY2022 Outlook

Based on strong Q3 results, the company raised its guidance for fiscal 2022.

The company now forecasts revenue in the range of $1.645 billion to $1.66 billion, while the consensus estimate is pegged at $1.63 billion.

Adjusted operating income is projected to be in the range of $180 million to $185 million.

Wall Street’s Take

Following upbeat Q3 results, Morgan Stanley analyst Greg Parrish increased the price target on Stride to $39 (23.3% upside potential) from $36 and reiterated a Hold rating.

Consensus among analysts is a Strong Buy based on three Buys and one Hold. The average Stride analyst price target of $43.67 implies 23.3% upside potential from the current levels.

Investors Weigh In

TipRanks’ Stock Investors tool shows that investors currently have a Very Positive stance on Stride, with 5.9% of investors increasing their exposure to LRN stock over the past 30 days.

Conclusion

The quarterly beat as well as raised guidance reassures investors of the company’s business strength, which is also visible in the share price gains of 16% over the past year, which beat the underlying benchmark equity markets.

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