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Stride
(NYSE:LRN)
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Rating:79Outperform
Price Target:
$112.00
▲(28.91% Upside)
Action:Reiterated
Date:07/31/26
LRN scores well primarily on strong financial performance (accelerating growth, expanding profitability over multiple years, and robust free cash flow) backed by an improving leverage profile. Technicals are supportive with the stock trading above all key moving averages. The score is tempered by earnings-call risks—gross margin pressure, platform/attrition issues, and guidance implying a softer Q4—while valuation looks reasonable on P/E but lacks dividend support in the provided data.
Positive Factors
Cash generation
Strong TTM operating cash flow and FCF indicate durable cash conversion ability. This cash provides flexibility to fund platform remediation, pay down debt, invest in growth or marketing, and absorb enrollment volatility without immediate pressure on operations or liquidity.
Negative Factors
Gross margin pressure from platform rollout
Ongoing platform investments and remediation have materially compressed gross margins. If issues persist, the company may face sustained higher operating costs or recurring remediation spend, weakening operating leverage and limiting margin recovery despite top-line growth.
Read all positive and negative factors
Positive Factors
Negative Factors
Cash generation
Strong TTM operating cash flow and FCF indicate durable cash conversion ability. This cash provides flexibility to fund platform remediation, pay down debt, invest in growth or marketing, and absorb enrollment volatility without immediate pressure on operations or liquidity.
Read all positive factors
Stride (LRN) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.41B
Dividend YieldN/A
Average Volume (3M)842.27K
Price to Earnings (P/E)11.2
Beta (1Y)0.24
Revenue Growth10.93%
EPS Growth2.97%
CountryUS
Employees8,600
SectorConsumer Defensive
Sector Strength42
IndustryEducation & Training Services
Share Statistics
EPS (TTM)7.17
Shares Outstanding42,524,840
10 Day Avg. Volume737,534
30 Day Avg. Volume842,274
Financial Highlights & Ratios
PEG Ratio0.55
Price to Book (P/B)4.22
Price to Sales (P/S)2.60
P/FCF Ratio16.76
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$109.00Price Target Upside25.46% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
EPS Forecast (FY)7.51
Revenue Forecast (FY)$2.65B
Stride Business Overview & Revenue Model
Company Description
Stride, Inc. (LRN) is a U.S.-based education company that provides technology-enabled learning solutions for K–12 students. The company operates online and blended public-school programs (including full-time virtual schools, blended schools, and r...
How the Company Makes Money
Stride primarily makes money through a mix of public-sector education funding tied to student enrollment and program services, and through tuition and fee-based education products. A major revenue stream comes from its General Education segment, w...
Stride Earnings Call Summary
Earnings Call Date:Apr 28, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Aug 04, 2026
Earnings Call Sentiment Positive
Overall the call balanced measurable near-term challenges (notably a 380 bps gross margin decline driven by platform investments, a 5% drop in General Education enrollment, ongoing platform remediation and marginally higher attrition) against multiple positive indicators: modest revenue growth (+2.7%), enrollment growth (+1.8%), strong Career Learning performance (+~16% revenue, +11.6% enrollment), a large sequential improvement in free cash flow, meaningful SG&A reductions, narrowed guidance ranges, and a robust new-business pipeline. Management framed the investments and enrollment trade-offs as deliberate to protect long-term demand and positioning.Positive Updates
Quarterly Revenue and Enrollment Growth
Total revenue of $629.9 million, up 2.7% year-over-year; total enrollments grew 1.8% to 244,500.
Negative Updates
Gross Margin Pressure
Gross margin fell to 36.8%, down 380 basis points year-over-year, primarily driven by continued investments and costs related to the platform rollout and transition.
Read all updates
Q3-2026 Updates
Positive
Negative
Quarterly Revenue and Enrollment Growth
Total revenue of $629.9 million, up 2.7% year-over-year; total enrollments grew 1.8% to 244,500.
Read all positive updates
Company Guidance
Management narrowed full‑year guidance to revenue of $2.490–$2.520 billion (from $2.480–$2.555B prior), adjusted operating income of $490–$500 million (from $485–$505M), and capital expenditures of $75–$80 million (from $70–$80M), while affirming an effective tax rate of 24–25%. They expect full‑year gross margin of ~37.0–37.4% (Q3 was 36.8%, down 380 bps) and total revenue per enrollment to be up roughly 2% for the year (Q3 RPE $2,485, up 2.9% from $2,415). Full‑year stock‑based compensation is guided to $40–$42 million, SG&A to finish down ~6–8% year‑over‑year (Q3 SG&A $102.5M, down 13.5%), adjusted EBITDA and adjusted operating income for Q3 were $171.3M (up 1.8%) and $140.4M (down 1%), adjusted EPS was $2.30 (down $0.03), Q3 CapEx was $18.5M, Q3 free cash flow was $202.4M (vs. $37.3M prior year) with FY free cash flow expected to be flattish, and cash and marketable securities totaled $856M. Management noted the guidance implies Q4 revenue below last year due to marginally higher attrition and timing of funding true‑ups and expects Q4 profitability to be lower than Q3 as they ramp marketing for the fall.Stride Financial Statement Overview
Summary
Income Statement
87
Very Positive
Balance Sheet
82
Very Positive
Cash Flow
86
Very Positive
| Breakdown | TTM | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.54B | 2.41B | 2.04B | 1.84B | 1.69B | 1.54B |
| Gross Profit | 972.24M | 943.92M | 763.60M | 647.07M | 596.48M | 534.90M |
| EBITDA | 535.73M | 508.39M | 386.18M | 291.31M | 253.26M | 203.36M |
| Net Income | 308.12M | 287.94M | 204.18M | 126.87M | 107.13M | 71.45M |
Balance Sheet | ||||||
| Total Assets | 2.45B | 2.29B | 1.92B | 1.76B | 1.64B | 1.58B |
| Cash, Cash Equivalents and Short-Term Investments | 805.84M | 985.27M | 692.29M | 522.73M | 389.40M | 386.08M |
| Total Debt | 547.42M | 549.76M | 528.21M | 543.81M | 565.67M | 466.28M |
| Total Liabilities | 805.01M | 814.34M | 744.44M | 813.37M | 830.96M | 772.65M |
| Stockholders Equity | 1.64B | 1.48B | 1.18B | 947.30M | 812.58M | 804.65M |
Cash Flow | ||||||
| Free Cash Flow | 374.78M | 372.81M | 217.21M | 136.60M | 139.26M | 81.89M |
| Operating Cash Flow | 429.38M | 432.82M | 278.80M | 203.15M | 206.88M | 134.15M |
| Investing Cash Flow | -153.97M | -88.00M | -139.87M | -118.24M | -110.76M | -165.44M |
| Financing Cash Flow | -191.88M | -62.94M | -49.12M | -63.50M | -93.31M | 204.58M |
Stride Technical Analysis
Negative
86.88
Price Trends
89.82
Negative
90.19
Negative
85.54
Negative
Market Momentum
-1.12
Positive
47.48
Neutral
35.74
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LRN, the sentiment is Negative. The current price of 86.88 is below the 20-day moving average (MA) of 88.25, below the 50-day MA of 89.82, and above the 200-day MA of 85.54, indicating a bearish trend. The MACD of -1.12 indicates Positive momentum. The RSI at 47.48 is Neutral, neither overbought nor oversold. The STOCH value of 35.74 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LRN.
Stride Risk Analysis
Stride disclosed 45 risk factors in its most recent earnings report. Stride reported the most risks in the "Tech & Innovation" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Stride Peers Comparison
UnderperformOutperform
Sector (62)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $1.82B | 13.33 | 8.19% | 3.17% | 3.53% | 23.97% | |
79 Outperform | $3.41B | 11.20 | 19.89% | ― | 10.93% | 2.97% | |
78 Outperform | $1.99B | 11.91 | 17.21% | 1.98% | 17.75% | 15.21% | |
63 Neutral | $1.52B | -7.46 | -17.74% | ― | 22.69% | -112.56% | |
62 Neutral | $20.33B | 14.63 | -3.31% | 3.23% | 1.93% | -12.26% | |
53 Neutral | $2.10B | 63.50 | 5.48% | ― | 0.07% | ― |
* Consumer Defensive Sector Average
LRN
Stride
80.29
-50.02
-38.39%
PRDO
Perdoceo Education
31.81
4.26
15.47%
STRA
Strategic Education
82.00
10.31
14.38%
COUR
Coursera
5.31
-7.06
-57.07%
MH
McGraw Hill, Inc.
10.96
-4.28
-28.08%
Stride Corporate Events
Business Operations and StrategyExecutive/Board ChangesFinancial Disclosures
Stride appoints new CEO amid strong preliminary results
Positive
Jul 30, 2026
On July 29, 2026, Stride executed a major leadership transition, with long-serving CEO and board chair James J. Rhyu stepping down without dispute over company matters, and independent director Robert E. Knowling appointed chief executive officer....
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.