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Stride (LRN)
NYSE:LRN
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Stride
(NYSE:LRN)
Rating:77Outperform
Price Target:
$168.00
▲(6.95% Upside)
Positive Factors
Financial Performance
Stride, Inc. reported financial results that significantly topped expectations, showcasing strong financial performance.
Stock Valuation
The stock is trading at a discount compared to its Ed Tech peers, despite having a similar revenue growth rate and EBITDA margin profile, indicating potential value for investors.
Negative Factors
Market Competition
The stock is trading at a discount to its Ed Tech peers, which may indicate concerns about competitive positioning in the market.
Stride (LRN) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$6.85B
Dividend YieldN/A
Average Volume (3M)662.77K
Price to Earnings (P/E)26.1
Beta (1Y)0.42
Revenue Growth17.90%
EPS Growth39.75%
CountryUS
Employees7,800
SectorConsumer Defensive
Sector Strength64
IndustryEducation & Training Services
Share Statistics
EPS (TTM)1.03
Shares Outstanding43,626,923
10 Day Avg. Volume957,133
30 Day Avg. Volume662,766
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap0.99
Enterprise Value/Revenue2.82
Enterprise Value/Gross Profit7.19
Enterprise Value/Ebitda18.12
Forecast
1Y Price Target
$164.50Price Target Upside4.72% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
Stride Business Overview & Revenue Model
Company DescriptionStride, Inc., a technology-based education service company, provides proprietary and third-party online curriculum, software systems, and educational services to facilitate individualized learning for students primarily in kindergarten through 12th grade (K-12) in the United States and internationally. Its technology-based products and services enable clients to attract, enroll, educate, track progress, and support students. The company offers integrated package of systems, services, products, and professional expertise to support a virtual or blended public school; individual online courses and supplemental educational products; and products and services for the general education market focused on subjects, including math, English, science, and history for kindergarten through twelfth grade students. It also provides career learning products and services that are focused on developing skills to enter in industries, including information technology, health care, and business; and focused post-secondary career learning programs, which include skills training for software engineering, healthcare, and medical fields to adult learners under Galvanize, Tech Elevator, and MedCerts brand names, as well as provides staffing and talent development services to employers. Stride, Inc. serves public and private schools, school districts, charter boards, consumers, employers, and government agencies. The company was formerly known as K12 Inc. and changed its name to Stride, Inc. in December 2020. Stride, Inc. was founded in 2000 and is headquartered in Reston, Virginia.
How the Company Makes MoneyStride generates revenue through a combination of tuition fees from students enrolled in its online schools, sales of educational products and services to school districts, and software licensing fees for its learning management systems. The company also benefits from partnerships with local and state education agencies, allowing it to expand its reach and influence in the education sector. Additionally, Stride may receive funding from grants and educational initiatives aimed at improving online learning opportunities.
Stride Earnings Call Summary
Earnings Call Date:Aug 05, 2025
(Q4-2025)
| % Change Since: 22.50%|
Next Earnings Date:Oct 28, 2025
Earnings Call Sentiment Positive
The earnings call highlighted Stride's strong financial performance with record revenue and operating income growth, significant enrollment increases, and a favorable funding environment. However, challenges such as the impairment charge in the Galvanize business and issues within the Adult Learning segment somewhat tempered the positive outlook. The company also effectively managed a significant contract loss in New Mexico by securing new district partners.Q4-2025 Updates
Positive Updates
Record-Breaking Revenue Growth
Full year revenue of $2.4 billion, up 18% from last year, with strong demand and continued momentum in the school choice market.
Significant Increase in Operating Income
Adjusted operating income of $466.2 million, up nearly 60% from last year, highlighting the benefits of scale and improvements in marketing.
Strong Enrollment Growth
Full year enrollments totaled 96,300 in Career Learning, up 33%, and General Education enrollments totaled 137,700, up 13%.
Awards and Recognitions
Stride received several notable awards including 'Company of the Year' by BIG Awards for Business and 'Best EdTech Company' by the Global EdTech Awards.
Positive Funding Environment
Despite some states holding funding flat, others are increasing, leading to an overall favorable funding environment for FY '26.
Effective Tax Rate and Cash Flow
Effective tax rate for FY '25 was 24.4%, with free cash flow of $372.8 million, up $155.6 million from last year.
Negative Updates
Galvanize Business Impairment Charge
A onetime noncash impairment charge of $59.5 million related to the Galvanize business due to lease expenses and trade name write-down.
Challenges in Adult Learning Segment
The Adult Learning business showed stabilization but was described as a disappointment with execution issues on the tech side.
Lost Contract in New Mexico
Termination of a contract with Gallup-McKinley school district affecting around 4,000 students, although new district partners mitigated the impact.
Company Guidance
During the earnings call for Stride's fourth quarter of fiscal year 2025, guidance was provided for fiscal year 2026. The company anticipates double-digit enrollment growth in the range of 10% to 15% for the first quarter, driven by strong application volumes, a proxy for demand. Stride projects revenue per enrollment to be relatively flat to slightly up compared to FY 2025, with a favorable funding environment as some states increase funding. The company expects gross margin expansion to continue but at a slower pace, with anticipated investments in products and services, such as tutoring for second and third-grade reading skills. For FY 2025, Stride reported a full-year revenue of $2.4 billion, up 18% year-over-year, with adjusted operating income of $466.2 million, reflecting a substantial 60% increase. Adjusted earnings per share were introduced as a new metric, showing a 48% rise to $8.10 from FY 2024. The call highlighted the company's strong market position, with an effective tax rate of 24.4% and free cash flow of $372.8 million.Stride Financial Statement Overview
Summary
Stride exhibits strong financial performance across all statements. The income statement shows robust growth and profitability, the balance sheet reflects a stable financial position with effective leverage management, and the cash flow statement highlights strong cash generation and management. The company is well-positioned for continued growth in the Education & Training Services industry.Income Statement
Stride has demonstrated strong revenue growth with a 5.23% increase in TTM, supported by a solid gross profit margin of 39.08%. The net profit margin has also improved to 13.10%, indicating enhanced profitability. EBIT and EBITDA margins are healthy at 17.84% and 22.71%, respectively, showcasing efficient operational management. Overall, the income statement reflects robust growth and profitability.85
Very Positive
Balance Sheet
The company's debt-to-equity ratio has improved to 0.40, indicating a stable leverage position. Return on equity is strong at 23.36%, reflecting effective use of equity to generate profits. The equity ratio stands at 64.50%, suggesting a solid capital structure. Overall, the balance sheet is stable with a good balance between debt and equity.78
Positive
Cash Flow
Stride's free cash flow growth is impressive at 54.36%, indicating strong cash generation capabilities. The operating cash flow to net income ratio is 1.14, showing efficient cash conversion. The free cash flow to net income ratio of 1.04 further supports the company's ability to generate cash relative to its net income. Overall, the cash flow statement reflects strong cash management and growth.82
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.41B | 2.41B | 2.04B | 1.84B | 1.69B | 1.54B |
| Gross Profit | 943.92M | 943.92M | 763.60M | 647.07M | 596.48M | 534.90M |
| EBITDA | 374.70M | 360.09M | 382.18M | 291.31M | 269.27M | 228.63M |
| Net Income | 474.05M | 287.94M | 204.18M | 126.87M | 107.13M | 71.45M |
Balance Sheet | ||||||
| Total Assets | 2.29B | 2.29B | 1.92B | 1.76B | 1.64B | 1.58B |
| Cash, Cash Equivalents and Short-Term Investments | 985.27M | 985.27M | 692.29M | 410.81M | 389.40M | 386.08M |
| Total Debt | 549.76M | 549.76M | 528.21M | 543.81M | 565.67M | 466.28M |
| Total Liabilities | 814.34M | 814.34M | 744.44M | 813.37M | 830.96M | 772.65M |
| Stockholders Equity | 1.48B | 1.48B | 1.18B | 947.30M | 812.58M | 804.65M |
Cash Flow | ||||||
| Free Cash Flow | 401.10M | 431.04M | 217.21M | 136.60M | 139.26M | 81.89M |
| Operating Cash Flow | 432.82M | 432.82M | 278.80M | 203.15M | 206.88M | 134.15M |
| Investing Cash Flow | -88.00M | -88.00M | -139.87M | -118.24M | -110.76M | -165.44M |
| Financing Cash Flow | -62.94M | -62.94M | -49.12M | -63.50M | -93.31M | 204.58M |
Stride Technical Analysis
Positive
157.08
Price Trends
139.50
Positive
141.15
Positive
128.37
Positive
Market Momentum
4.92
Negative
71.64
Negative
89.01
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LRN, the sentiment is Positive. The current price of 157.08 is above the 20-day moving average (MA) of 137.63, above the 50-day MA of 139.50, and above the 200-day MA of 128.37, indicating a bullish trend. The MACD of 4.92 indicates Negative momentum. The RSI at 71.64 is Negative, neither overbought nor oversold. The STOCH value of 89.01 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $6.85B | 26.10 | 21.69% | ― | 17.90% | 39.75% | |
77 Outperform | $5.51B | 23.77 | 30.77% | ― | 6.52% | 11.72% | |
77 Outperform | $3.80B | 15.22 | 25.81% | ― | 0.44% | 35.19% | |
73 Outperform | $7.61B | 21.30 | 10.00% | 1.21% | 13.72% | 21.23% | |
72 Outperform | $4.61B | 20.71 | 16.60% | ― | 12.85% | 81.69% | |
67 Neutral | $6.92B | 68.75 | 2.88% | ― | 48.08% | 97.15% | |
63 Neutral | $20.97B | 14.56 | -8.07% | 3.13% | 2.79% | -9.84% |
* Consumer Defensive Sector Average
Performance Comparison
LRN
Stride
157.08
74.55
90.33%
ATGE
Adtalem Global Education
128.80
55.87
76.61%
LOPE
Grand Canyon Education
196.10
56.28
40.25%
EDU
New Oriental Education Tech
48.40
-22.33
-31.57%
TAL
TAL Education Group
11.44
2.43
26.97%
LAUR
Laureate Education
25.80
10.91
73.27%
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.