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Strategic Education
(NASDAQ:STRA)
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Rating:80Outperform
Price Target:
$101.00
▲(33.53% Upside)
Action:Reiterated
Date:07/30/26
STRA scores well primarily due to strong financial quality (improving margins and very low leverage) and a supportive valuation (P/E ~14 with a ~2.74% dividend). The technical trend is positive with shares above major moving averages, while the latest earnings call adds cautious optimism from ongoing margin expansion and strong ETS/Sophia momentum, tempered by Australia-related charges, ANZ enrollment weakness, and near-term revenue uncertainty versus the company’s notional model.
Positive Factors
Conservative Balance Sheet
Very low leverage and a strong equity base give the company durable financial flexibility. This conservative capital structure supports continued share repurchases, targeted investments in product and quality, and ability to absorb regional enrollment volatility without needing material new debt.
Negative Factors
Australia Labor Charge & Legal Risk
The $13M reserve and pending High Court appeal introduce legal and operational uncertainty in ANZ. An adverse precedent could raise instructional costs, require further reserves or remediation, and compress regional margins; this regulatory risk could also lead to higher compliance costs globally.
Read all positive and negative factors
Positive Factors
Negative Factors
Conservative Balance Sheet
Very low leverage and a strong equity base give the company durable financial flexibility. This conservative capital structure supports continued share repurchases, targeted investments in product and quality, and ability to absorb regional enrollment volatility without needing material new debt.
Read all positive factors
Strategic Education (STRA) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.98B
Dividend Yield2.82%
Average Volume (3M)287.04K
Price to Earnings (P/E)14.0
Beta (1Y)0.73
Revenue Growth3.53%
EPS Growth23.97%
CountryUS
Employees6,134
SectorConsumer Defensive
Sector Strength42
IndustryEducation & Training Services
Share Statistics
EPS (TTM)6.15
Shares Outstanding22,207,560
10 Day Avg. Volume292,777
30 Day Avg. Volume287,040
Financial Highlights & Ratios
PEG Ratio0.90
Price to Book (P/B)1.08
Price to Sales (P/S)1.40
P/FCF Ratio11.56
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
$98.33Price Target Upside30.00% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
EPS Forecast (FY)7.19
Revenue Forecast (FY)$1.29B
Strategic Education Business Overview & Revenue Model
Company Description
Strategic Education, Inc. (SEI) delivers a broad spectrum of educational services, encompassing both traditional campus-based and online post-secondary learning, alongside programs designed to cultivate career-ready competencies. The company opera...
How the Company Makes Money
Strategic Education primarily earns revenue by charging tuition and related educational fees to students enrolled in its academic programs. A significant portion of its revenue is supported by student financial aid programs (such as U.S. federal s...
Strategic Education Earnings Call Summary
Earnings Call Date:Jul 29, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 29, 2026
Earnings Call Sentiment Positive
The call conveyed solid operating momentum and margin expansion driven by Education Technology Services and U.S. Higher Education (notably employer-affiliated and healthcare enrollment), strong cash flow and share repurchases, and continued scale at Sophia and Workforce Edge. That said, a material $13 million Australia labor charge, ANZ enrollment declines and visa processing headwinds, and academic integrity/AI concerns at Sophia are notable near-term challenges. Management expects margin improvement and has mitigation plans for ANZ instructional costs, but revenue could be pressured in 2026 relative to the notional model.Positive Updates
Consolidated Revenue and Profitability Improvement
Second quarter revenue increased ~3% year-over-year to $330 million. Operating income was $53 million, up 9% year-over-year, and operating margin improved to 16%, a 90 basis point increase versus prior year. Adjusted EPS was $1.76, a 16% increase year-over-year.
Negative Updates
Australia Labor Matter and One-Time Charge
Recorded a $13 million reserve/one-time charge related to an Australian labor matter (grading time compensation) which reduced reported operating income in ANZ; appellate court ruled grading should be compensated separately and the company has appealed to the Australian High Court.
Read all updates
Q2-2026 Updates
Positive
Negative
Consolidated Revenue and Profitability Improvement
Second quarter revenue increased ~3% year-over-year to $330 million. Operating income was $53 million, up 9% year-over-year, and operating margin improved to 16%, a 90 basis point increase versus prior year. Adjusted EPS was $1.76, a 16% increase year-over-year.
Read all positive updates
Company Guidance
Management provided directional (not formal) guidance that full‑year revenue per student should be roughly flat, full‑year revenue could finish slightly below its notional 5% model but is expected to revert to about 5% growth over the next 12 months, and the company remains committed to at least 200 basis points of adjusted operating income (EBIT) margin expansion (and expects to potentially outperform that target even after taking an approximately $13M reserve/charge in Australia); they also expect Australia to return to growth in 2027 and anticipate a decision on the Australian High Court appeal by Sept/Oct. Supporting current results cited on the call include Q2 revenue of $330M (+3% YoY), adjusted EPS $1.76 (+16%), year‑to‑date operating cash flow $117M (+18%), ETS revenue $42M (+15%) with operating income $20M and a 46.2% margin (+520 bps), Sophia revenue $21M (+27%) and subscribers +32%, Workforce Edge with 81 corporate agreements covering 4M employees and ~4,000 enrollments (+21%), U.S. Higher Ed revenue +2%, operating income $32M (+56%) and a 15% margin (+500 bps) with student retention at 89%, and Australia revenue $67M (≈‑3%) with enrollment down ~5% and operating income of $1M after the reserve; Q2 buybacks totaled ~421,000 shares for $33M with ~$141M remaining authorization.Strategic Education Financial Statement Overview
Summary
Income Statement
84
Very Positive
Balance Sheet
90
Very Positive
Cash Flow
74
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.29B | 1.27B | 1.22B | 1.13B | 1.07B | 1.13B |
| Gross Profit | 631.04M | 621.11M | 569.43M | 509.02M | 468.16M | 523.42M |
| EBITDA | 220.20M | 225.80M | 201.65M | 170.43M | 137.12M | 214.00M |
| Net Income | 134.51M | 126.61M | 112.68M | 69.79M | 46.67M | 55.09M |
Balance Sheet | ||||||
| Total Assets | 2.07B | 2.04B | 2.05B | 2.13B | 2.16B | 2.31B |
| Cash, Cash Equivalents and Short-Term Investments | 128.75M | 148.05M | 184.02M | 208.21M | 222.82M | 275.42M |
| Total Debt | 106.71M | 109.12M | 125.23M | 213.32M | 259.28M | 331.46M |
| Total Liabilities | 435.28M | 392.13M | 387.24M | 472.69M | 525.96M | 591.89M |
| Stockholders Equity | 1.63B | 1.65B | 1.66B | 1.65B | 1.64B | 1.71B |
Cash Flow | ||||||
| Free Cash Flow | 181.42M | 153.95M | 128.75M | 80.18M | 82.88M | 131.09M |
| Operating Cash Flow | 228.72M | 198.20M | 169.33M | 117.12M | 126.05M | 180.53M |
| Investing Cash Flow | -8.74M | 8.51M | -64.36M | -48.55M | -31.36M | -33.09M |
| Financing Cash Flow | -252.65M | -206.16M | -136.77M | -113.61M | -142.36M | -67.89M |
Strategic Education Technical Analysis
Positive
75.64
Price Trends
78.98
Positive
79.39
Positive
79.18
Positive
Market Momentum
-0.98
Positive
42.95
Neutral
14.98
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For STRA, the sentiment is Positive. The current price of 75.64 is below the 20-day moving average (MA) of 80.30, below the 50-day MA of 78.98, and below the 200-day MA of 79.18, indicating a bullish trend. The MACD of -0.98 indicates Positive momentum. The RSI at 42.95 is Neutral, neither overbought nor oversold. The STOCH value of 14.98 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for STRA.
Strategic Education Risk Analysis
Strategic Education disclosed 39 risk factors in its most recent earnings report. Strategic Education reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Strategic Education Peers Comparison
UnderperformOutperform
Sector (62)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $1.98B | 13.98 | 8.19% | 3.17% | 3.53% | 23.97% | |
78 Outperform | $2.17B | 12.30 | 17.21% | 1.98% | 17.75% | 15.21% | |
74 Outperform | $5.38B | 20.06 | 25.38% | ― | 13.81% | 1.26% | |
72 Outperform | $4.22B | 18.69 | 29.53% | ― | 7.43% | 0.49% | |
68 Neutral | $939.55M | 25.48 | 14.02% | ― | 3.84% | 87.34% | |
63 Neutral | $1.77B | -15.39 | -17.74% | ― | 22.69% | -112.56% | |
62 Neutral | $20.33B | 14.63 | -3.31% | 3.23% | 1.93% | -12.26% |
* Consumer Defensive Sector Average
STRA
Strategic Education
85.08
13.12
18.23%
APEI
American Public Education
49.63
20.11
68.12%
PRDO
Perdoceo Education
32.46
4.23
14.97%
LOPE
Grand Canyon Education
150.13
-18.50
-10.97%
LAUR
Laureate Education
38.41
15.81
69.96%
COUR
Coursera
5.27
-7.37
-58.31%
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.