Strategic Education (STRA) AI Stock Analysis

• Market Cap: $1.86B
• Dividend Yield: 3.08%
• Average Volume (3M): 185.25K
• Price to Earnings (P/E): 16.2
• Beta (1Y): 0.89
• Revenue Growth: 4.31%
• EPS Growth: -1.08%
• Country: US
• Employees: 3,801
• Sector: Consumer Defensive
• Sector Strength: 64
• Industry: Education & Training Services
• EPS (TTM): 1.52
• Shares Outstanding: 23,900,408
• 10 Day Avg. Volume: 192,287
• 30 Day Avg. Volume: 185,255
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.05
• Enterprise Value/Revenue: 1.57
• Enterprise Value/Gross Profit: 6.76
• Enterprise Value/Ebitda: 10.42
• 1Y Price Target: $91.67
• Price Target Upside: 17.68% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4

• Rating: 71 Outperform
• Price Target: $82.00 ▲(5.26% Upside)

Strategic Education's strong financial performance and positive earnings call sentiment are significant strengths, highlighting growth in the ETS segment and effective cost management. However, the bearish technical indicators and challenges in enrollment present risks. The valuation is fair, offering a decent dividend yield for income-focused investors. Overall, the stock is positioned for potential growth but faces short-term headwinds.

Positive Factors

Earnings and Financial Performance

Strategic Education's second quarter revenue and earnings exceeded expectations, driven by strong performance in the Education Technology Services segment.

Valuation

The company's stock is trading at a discount compared to its peer group, suggesting potential for upside in its valuation.

Negative Factors

Enrollment and Growth

Total enrollment was below the consensus estimate, impacting the overall sentiment.

Regulatory Impact

Australia/New Zealand growth has slowed due to regulatory changes impacting international students.

Strategic Education Business Overview & Revenue Model

Company Description

Strategic Education, Inc., through its subsidiaries, provides education services through campus-based and online post-secondary education, and programs to develop job-ready skills. It operates through three segments: U.S. Higher Education, Australia/New Zealand, and Education Technology Services. The company operates Strayer University that offers undergraduate and graduate degree programs in business administration, accounting, information technology, education, health services administration, public administration, and criminal justice at physical campuses located in the eastern United States, as well as through online; non-degree web and mobile application development courses through Hackbright Academy and Devmountain; and an executive MBA online through its Jack Welch Management Institute. It also operates Capella University, an online post-secondary education institution that provides various bachelor's, master's, and doctoral degree programs to working adults in arts and sciences, business and technology, counseling and human services, education, nursing and health sciences, psychology, and public service leadership. The company operates Torrens University, which offers undergraduate, graduate, higher degree by research, and specialized degree courses primarily in business, design and creative technology, health, hospitality, and education fields through online and on physical campuses located in Australia; Think Education, a vocational training organization; and Media Design School, which provides industry-endorsed courses in 3D animation and visual effects, game art and programming, graphic and motion design, digital media artificial intelligence, and creative advertising in New Zealand. It also offers Workforce Edge, a platform to employers that provides education benefits administration solutions; and Sophia Learning, which enables lower cost education benefits programs. The company was founded in 1892 and is headquartered in Herndon, Virginia.

How the Company Makes Money

Strategic Education generates revenue primarily through tuition and fees from students enrolled in its online degree programs. The company has a diverse revenue model that includes direct payments from students as well as federal financial aid, which is a significant source of funding for many of its enrolled students. Additionally, Strategic Education benefits from partnerships with employers and organizations that provide tuition reimbursement programs, further enhancing its revenue streams. The company also explores opportunities in workforce development and corporate training, which contribute to its earnings by offering tailored educational solutions to businesses seeking to enhance employee skills and competencies.

Strategic Education Financial Statement Overview

Summary

Strategic Education demonstrates solid financial health with consistent revenue growth and strong cash flow management. The company maintains a low leverage and high equity ratio, ensuring financial stability. However, profitability metrics like ROE have room for improvement.

Income Statement

Strategic Education has shown a steady increase in revenue over the years, with a TTM revenue growth rate of 1.09%. The gross profit margin improved significantly in the TTM period at 60.05% compared to the previous annual margin of 46.68%. The net profit margin is consistent, maintaining around 9.14% TTM. While EBIT and EBITDA margins are stable, there is room for improvement in operational efficiency.

Balance Sheet

The company maintains a strong equity base, with an equity ratio of 79.23% TTM, indicating financial stability. The debt-to-equity ratio is low at 0.07 TTM, signifying prudent leverage management. However, the return on equity has potential for enhancement at 6.86% TTM, suggesting moderate profitability relative to equity.

Cash Flow

Operating cash flow remains healthy with a stable ratio of 1.41 TTM to net income. Free cash flow growth shows a slight decline of 8.64% TTM, yet the company maintains robust cash flow generation relative to net income, suggesting efficient cash management practices.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.24B	1.22B	1.13B	1.07B	1.13B	1.03B
Gross Profit	287.86M	569.43M	509.02M	468.16M	523.42M	494.99M
EBITDA	186.81M	155.63M	170.43M	137.12M	214.00M	244.69M
Net Income	115.16M	112.68M	69.79M	46.67M	55.09M	86.27M
Balance Sheet
Total Assets	2.09B	2.05B	2.13B	2.16B	2.31B	2.30B
Cash, Cash Equivalents and Short-Term Investments	164.95M	184.02M	208.21M	222.82M	275.42M	195.07M
Total Debt	120.30M	125.23M	213.32M	259.28M	331.46M	282.78M
Total Liabilities	424.81M	387.24M	472.69M	525.96M	591.89M	547.49M
Stockholders Equity	1.67B	1.66B	1.65B	1.64B	1.71B	1.75B
Cash Flow
Free Cash Flow	124.46M	128.75M	80.18M	82.88M	131.09M	96.09M
Operating Cash Flow	166.26M	169.33M	117.12M	126.05M	180.53M	142.91M
Investing Cash Flow	-62.77M	-64.36M	-48.55M	-31.36M	-33.09M	-642.19M
Financing Cash Flow	-202.18M	-136.77M	-113.61M	-142.36M	-67.89M	279.19M

Strategic Education Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 77.90
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For STRA, the sentiment is Neutral. The current price of 77.9 is above the 20-day moving average (MA) of 77.13, below the 50-day MA of 81.27, and below the 200-day MA of 87.59, indicating a neutral trend. The MACD of -1.00 indicates Negative momentum. The RSI at 48.15 is Neutral, neither overbought nor oversold. The STOCH value of 84.45 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for STRA.

Strategic Education Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PRDO	78 Outperform	$2.08B	13.87	16.39%	1.63%	15.99%	13.25%
UTI	72 Outperform	$1.44B	22.64	23.11%	―	14.56%	127.02%
STRA	71 Outperform	$1.86B	16.20	6.89%	3.08%	4.31%	-1.08%
APEI	69 Neutral	$516.36M	27.09	10.20%	―	5.50%	338.59%
LINC	58 Neutral	$638.38M	42.96	8.27%	―	14.53%	75.66%
KLC	58 Neutral	$1.16B	35.79	-10.31%	―	3.85%	-208.51%
Sector *	53 Neutral	C$5.40B	6.74	11.95%	3.33%	4.99%	-1.01%

Strategic Education Corporate Events

Strategic Education Board Member Jerry Johnson Resigns

On May 21, 2025, Jerry Johnson resigned from the Board of Directors of Strategic Education, Inc. to focus on other professional commitments. His departure was not due to any disagreements with the company, and the company expressed gratitude for his service.

The most recent analyst rating on (STRA) stock is a Buy with a $130.00 price target. To see the full list of analyst forecasts on Strategic Education stock, see the STRA Stock Forecast page.