Stride reaction to Department of Ed worries ‘overdone,’ says Morgan Stanley

Morgan Stanley analyst Greg Parrish notes Stride (LRN) is trading down 13% today following a 5% decline yesterday on fears around dissolving the Department of Education. However, the firm notes that less than 10% of U.S. schools’ K12 funding comes from federal sources as primary schools are primarily funded through state and local government. For Stride, less than 5% of funding comes from federal sources, while the firm also sees the likelihood of actually dissolving the Department of Education as low, so it finds the reaction to be “overdone.” Morgan Stanley maintains an Equal Weight rating and $117 price target on Stride shares.