Strategic Education Inc (STRA)
NASDAQ:STRA
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Strategic Education
(NASDAQ:STRA)
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Rating:75Outperform
Price Target:
$88.00
▲(5.43% Upside)
Action:UpgradedDate:02/27/26
The score is driven primarily by strong financial quality (low leverage and improving cash generation) and supportive earnings-call outlook (margin expansion model and large productivity savings/capital return). These positives are offset by weak technical momentum and a significant financial-statement red flag in 2025 (negative gross profit/margin), which warrants added caution despite otherwise solid profitability.
Positive Factors
Cash generation
Improving operating and free cash flow across 2024–2025 indicates sustainable internal funding for dividends, buybacks and selective reinvestment. Consistent FCF coverage of earnings reduces financing risk and supports durable capital return and strategic investment plans.
Negative Factors
Negative gross profit anomaly
A negative gross profit/gross margin in 2025 is a material outlier that may reflect severe cost pressure, one-time reclassification, or reporting anomalies. If structural, it threatens core margin sustainability and undermines operating leverage that otherwise supported improved net income.
Read all positive and negative factors
Positive Factors
Negative Factors
Cash generation
Improving operating and free cash flow across 2024–2025 indicates sustainable internal funding for dividends, buybacks and selective reinvestment. Consistent FCF coverage of earnings reduces financing risk and supports durable capital return and strategic investment plans.
Read all positive factors
Strategic Education (STRA) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.90B
Dividend Yield2.99%
Average Volume (3M)338.00K
Price to Earnings (P/E)14.1
Beta (1Y)0.85
Revenue Growth3.74%
EPS Growth-8.40%
CountryUS
Employees3,801
SectorConsumer Defensive
Sector Strength42
IndustryEducation & Training Services
Share Statistics
EPS (TTM)1.74
Shares Outstanding22,730,390
10 Day Avg. Volume257,220
30 Day Avg. Volume338,004
Financial Highlights & Ratios
PEG Ratio0.88
Price to Book (P/B)1.08
Price to Sales (P/S)1.40
P/FCF Ratio11.56
Enterprise Value/Market Cap0.98
Enterprise Value/Revenue1.47
Enterprise Value/Gross Profit3.00
Enterprise Value/Ebitda8.16
Forecast
1Y Price Target
$95.00Price Target Upside13.81% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
EPS Forecast (FY)6.43
Revenue Forecast (FY)$1.32B
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, Austral...
How the Company Makes Money
Strategic Education generates revenue primarily through tuition and fees paid by students enrolled in its various degree programs. The company's revenue model is bolstered by its extensive online learning platform, allowing for a broad reach to st...
Strategic Education Earnings Call Summary
Earnings Call Date:Feb 26, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 23, 2026
Earnings Call Sentiment Positive
The call presented a strong financial performance story with multi‑segment growth, significant margin expansion, record results in several businesses (ETS, Workforce Edge, Sophia Learning), and meaningful AI-driven productivity savings that funded share repurchases and dividends. Key challenges remain around unaffiliated U.S. higher education enrollment declines and regulatory headwinds in Australia/New Zealand, but management expects those trends to normalize over time and reiterated a multi-year notional model for modest revenue growth and continued margin improvement.Positive Updates
Quarterly and Full-Year Revenue Growth
Revenue increased 4% in Q4 2025 (adjusted, constant currency) and 4% for full year 2025.
Negative Updates
Unaffiliated U.S. Higher Education Enrollment Declines
Total U.S. Higher Education enrollment declined year-over-year (largest drop in Q4), with decreases concentrated in unaffiliated (non‑employer) channels. Management attributes this to cyclical trends and has not signaled a change in portfolio marketing strategy toward unaffiliated enrollment.
Read all updates
Q4-2025 Updates
Positive
Negative
Quarterly and Full-Year Revenue Growth
Revenue increased 4% in Q4 2025 (adjusted, constant currency) and 4% for full year 2025.
Read all positive updates
Company Guidance
Management said 2026 is expected to track the company’s 2023 “notional model,” targeting revenue CAGR of 4–6% and adjusted operating income margin expansion of about 200 basis points per year; they reiterated ETS should remain a strong growth driver, ANZ is expected to return to total enrollment growth by year‑end 2026, and employer‑affiliated strength (33.5% of U.S. higher‑ed enrollment, 40% of new U.S. higher‑ed students, healthcare = 50% of U.S. enrollment and 37% of employer‑affiliated) should support results. Management said AI‑driven productivity delivered ~$30M of expense savings in 2025 and the company is on track to generate at least an additional $70M of savings through the end of 2027, with those savings to be used to fund growth and expand margins. On capital allocation, 2025 produced $247M of pretax cash from operations, $154M of distributable free cash flow after $49M of taxes and $44M of capex, and the company returned about $58M via a $2.40 common dividend and just under $140M in share repurchases (including $45M in Q4; 1.7M shares, ~7% of outstanding), with >$200M remaining on the repurchase authorization and $153M of cash and marketable securities and no debt at year‑end.Strategic Education Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
86
Very Positive
Cash Flow
80
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.27B | 1.22B | 1.13B | 1.07B | 1.13B |
| Gross Profit | 621.11M | 569.43M | 509.02M | 468.16M | 523.42M |
| EBITDA | 225.80M | 201.65M | 170.43M | 137.12M | 214.00M |
| Net Income | 126.61M | 112.68M | 69.79M | 46.67M | 55.09M |
Balance Sheet | |||||
| Total Assets | 2.04B | 2.05B | 2.13B | 2.16B | 2.31B |
| Cash, Cash Equivalents and Short-Term Investments | 148.05M | 184.02M | 208.21M | 222.82M | 275.42M |
| Total Debt | 109.12M | 125.23M | 213.32M | 259.28M | 331.46M |
| Total Liabilities | 392.13M | 387.24M | 472.69M | 525.96M | 591.89M |
| Stockholders Equity | 1.65B | 1.66B | 1.65B | 1.64B | 1.71B |
Cash Flow | |||||
| Free Cash Flow | 153.95M | 128.75M | 80.18M | 82.88M | 131.09M |
| Operating Cash Flow | 198.20M | 169.33M | 117.12M | 126.05M | 180.53M |
| Investing Cash Flow | 8.51M | -64.36M | -48.55M | -31.36M | -33.09M |
| Financing Cash Flow | -206.16M | -136.77M | -113.61M | -142.36M | -67.89M |
Strategic Education Technical Analysis
Positive
83.47
Price Trends
80.56
Positive
80.31
Positive
79.80
Positive
Market Momentum
0.93
Negative
56.45
Neutral
78.25
Neutral
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 83.47 is above the 20-day moving average (MA) of 81.70, above the 50-day MA of 80.56, and above the 200-day MA of 79.80, indicating a bullish trend. The MACD of 0.93 indicates Negative momentum. The RSI at 56.45 is Neutral, neither overbought nor oversold. The STOCH value of 78.25 is Neutral, 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 |
|---|---|---|---|---|---|---|---|
85 Outperform | $2.29B | 11.89 | 16.30% | 1.88% | 24.23% | 17.56% | |
75 Outperform | $1.90B | 14.05 | 7.66% | 2.99% | 3.74% | -8.40% | |
71 Outperform | $1.06B | 21.57 | 10.92% | ― | 6.75% | 141.11% | |
69 Neutral | $1.95B | 27.79 | 16.98% | ― | 14.05% | 51.96% | |
62 Neutral | $20.33B | 14.63 | -3.31% | 3.23% | 1.93% | -12.26% | |
62 Neutral | $1.29B | 14.71 | 10.75% | ― | 16.90% | 41.11% | |
47 Neutral | $321.93M | -4.36 | -12.92% | ― | 2.20% | -229.99% |
* Consumer Defensive Sector Average
STRA
Strategic Education
83.47
4.37
5.52%
APEI
American Public Education
57.71
33.65
139.86%
PRDO
Perdoceo Education
36.71
10.99
42.72%
LINC
Lincoln Edu
40.42
23.47
138.47%
UTI
Universal Technical Institute
35.52
7.99
29.02%
KLC
KinderCare Learning Companies Inc
2.72
-8.83
-76.45%
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.