Strategic Education (STRA) AI Stock Analysis

• Market Cap: $2.04B
• Dividend Yield: 2.84%
• Average Volume (3M): 173.57K
• Price to Earnings (P/E): 18.1
• Beta (1Y): 0.90
• Revenue Growth: 5.72%
• EPS Growth: 11.02%
• Country: US
• Employees: 3,801
• Sector: Consumer Defensive
• Sector Strength: 70
• Industry: Education & Training Services
• EPS (TTM): 1.30
• Shares Outstanding: 24,163,239
• 10 Day Avg. Volume: 165,996
• 30 Day Avg. Volume: 173,573
• PEG Ratio: -2.77
• Price to Book (P/B): 1.13
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 22.38
• Enterprise Value/Market Cap: 0.93
• Enterprise Value/Revenue: 0.39
• Enterprise Value/Gross Profit: 3.26
• Enterprise Value/Ebitda: 2.25
• 1Y Price Target: $102.67
• Price Target Upside: 22.30% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3

• Rating: 73 Outperform
• Price Target: ―

Strategic Education's stock score is driven by solid financial performance and positive earnings call highlights, particularly in terms of revenue and strategic partnerships. However, mixed technical indicators and valuation concerns provide a balanced view, with challenges in international markets and slowing domestic enrollment growth slightly tempering the outlook.

Positive Factors

Dividend Yield

A secure common dividend yielding 3.0% at current levels adds to the attractiveness of the stock.

Financial Performance

Revenue increased 4.6% to $303.6 million, above the FactSet consensus of $300.7 million, and Adjusted EBITDA increased 10.5% to $60.0 million, above the FactSet consensus of $48.7 million.

Investment Opportunity

The stock is trading at a discount compared to its peer group, offering a potential investment opportunity.

Negative Factors

Enrollment Decline

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

Price Target Adjustment

The price target has been scaled back to $105 from $120, reflecting adjustments in expectations.

Revenue and Enrollment Expectations

Revenue and enrollment were below expectations, leading to a decrease in stock price by approximately 17%.

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 fees from students enrolled in its degree programs at Strayer University and Capella University. The company offers both online and on-campus courses, with a significant portion of its revenue coming from online enrollments. Additionally, Strategic Education earns money through its non-degree programs and corporate partnerships, which provide customized training and educational services to businesses and organizations looking to enhance the skills of their employees. The company's revenue is influenced by enrollment levels, tuition rates, and partnerships with corporate clients that seek tailored educational solutions for workforce development.

Strategic Education Financial Statement Overview

Summary

Strategic Education demonstrates solid financial health with consistent revenue growth and strong cash flow management. The company's low leverage and high equity ratio indicate a stable financial structure. While profitability metrics like ROE can be improved, the overall financial position is resilient, supporting future growth prospects.

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
1.23B	1.22B	1.13B	1.07B	1.13B	1.03B
	Gross Profit
582.20M	569.43M	509.02M	468.16M	523.42M	494.99M
	EBIT
156.06M	155.63M	95.32M	70.76M	147.26M	161.69M
	EBITDA
208.24M	155.63M	170.43M	137.12M	214.00M	244.69M
	Net Income Common Stockholders
112.73M	112.68M	69.79M	46.67M	55.09M	86.27M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
182.64M	184.02M	208.21M	222.82M	275.42M	195.07M
	Total Assets
2.07B	2.05B	2.13B	2.16B	2.31B	2.30B
	Total Debt
119.48M	125.23M	213.32M	259.28M	331.46M	282.78M
	Net Debt
-24.73M	-11.85M	44.84M	45.61M	62.54M	95.27M
	Total Liabilities
430.90M	387.24M	472.69M	525.96M	591.89M	547.49M
	Stockholders Equity
1.64B	1.66B	1.65B	1.64B	1.71B	1.75B
Cash Flow		Free Cash Flow
117.65M	128.75M	80.18M	82.88M	131.09M	96.09M
	Operating Cash Flow
159.36M	169.33M	117.12M	126.05M	180.53M	142.91M
	Investing Cash Flow
-65.06M	-64.36M	-48.55M	-31.36M	-33.09M	-642.19M
	Financing Cash Flow
-174.45M	-136.77M	-113.61M	-142.36M	-67.89M	279.19M

Strategic Education Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 83.95
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For STRA, the sentiment is Negative. The current price of 83.95 is below the 20-day moving average (MA) of 88.60, below the 50-day MA of 84.50, and below the 200-day MA of 89.56, indicating a bearish trend. The MACD of -0.02 indicates Positive momentum. The RSI at 40.91 is Neutral, neither overbought nor oversold. The STOCH value of 12.65 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for STRA.

Strategic Education Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LOPE	82 Outperform	$5.21B	23.09	29.85%	―	6.31%	11.24%
LRN	82 Outperform	$6.19B	22.17	23.76%	―	14.90%	60.56%
LAUR	74 Outperform	$3.28B	11.78	31.14%	―	1.26%	140.30%
STRA	73 Outperform	$2.04B	18.10	6.86%	2.84%	5.72%	11.02%
APEI	66 Neutral	$492.12M	27.07	8.18%	―	4.86%	―
Sector *	65 Neutral	$8.89B	14.91	4.67%	6.16%	3.60%	-2.89%
KLC	55 Neutral	$1.27B	35.79	-13.54%	―	4.87%	-198.67%

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.