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1. Company Snapshot

1.a. 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.

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1.b. Last Insights on STRA

Strategic Education's recent performance was negatively impacted by weakness in its Australia/New Zealand operations and flat U.S. Higher Education segment. However, the company's Education Technology Services segment drove revenue growth of 2.9% to $321.5 million. The EdTech segment's rapid expansion and B2B partnerships, including with Best Buy, are offsetting declines elsewhere. Additionally, Sophia Learning subscriber growth is accelerating, and WorkForce Edge is scaling quickly. The company's debt-free balance sheet and robust free cash flow support consistent capital returns via dividends and buybacks.

1.c. Company Highlights

2. Strategic Education's Q3 2025 Earnings: Sustained Strength in Education Technology and Services

Strategic Education's third-quarter 2025 results demonstrated robust financial performance, with adjusted constant currency revenue rising 5% year-over-year. Operating expenses grew less than 1%, resulting in a 39% increase in operating income and a 400 basis point expansion in margin. Adjusted earnings per share (EPS) came in at $1.64, a 41% increase from the prior year, slightly ahead of the reported EPS of $1.63. The company's Education Technology and Services segment drove this growth, with Sophia and Workforce Edge contributing to the segment's success.

Publication Date: Nov -16

📋 Highlights
  • Education Tech & Services Growth:: Revenue and operating income surged 46% and 48% to $38M and $16M, driven by Sophia’s 42% subscriber/revenue growth.
  • Margin Expansion:: Operating income rose 39%, and margins expanded 400 bps despite <1% expense growth.
  • U.S. Higher Education Performance:: +3% revenue growth from higher per-student revenue, with employer-affiliated enrollment at 33% (up 8% YoY).
  • Australia/NZ Segment Outlook:: 2% enrollment/revenue decline due to regulations, but 3% international cap increase expected by 2026.
  • Capital Allocation:: $34M spent on 429K share buybacks, $134M remaining, plus $100M opex savings target by 2027.

Segment Performance

The Education Technology Services division saw significant revenue and operating income growth, with a 46% and 48% increase, respectively, to $38 million and $16 million. Sophia Learning's subscribers and revenue grew 42%, while U.S. Higher Education revenue rose 3% due to higher revenue per student, driven by fewer drops, less discounting, and more courses taken. Employer-affiliated enrollment increased 8% and now represents 33% of all U.S. Higher Education enrollment.

Regional Performance

The Australia and New Zealand segment experienced a 2% decline in enrollment and revenue due to regulatory restrictions on international student enrollment. However, recent guidance from the Australian government indicates that international caps will increase 3% in 2026, providing a positive outlook for the segment.

Capital Allocation and Guidance

The company repurchased approximately 429,000 shares during the quarter for $34 million, leaving $134 million remaining on its share repurchase authorization. Management remains committed to its productivity initiatives, targeting $100 million in operating expense savings by the end of 2027. The company expects to hit the targets laid out at its Investor Day, with no changes to its notional model. Analysts estimate next year's revenue growth at 3.8%.

Valuation and Outlook

3. NewsRoom

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Strategic Education, Inc. (STRA) Q3 2025 Earnings Call Transcript

Nov -07

Source: seekingalpha.com

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Strategic Education (STRA) Q3 Earnings: Taking a Look at Key Metrics Versus Estimates

Nov -06

Source: zacks.com

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Strategic Education (STRA) Beats Q3 Earnings and Revenue Estimates

Nov -06

Source: zacks.com

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Strategic Education, Inc. Reports Third Quarter 2025 Results

Nov -06

Source: businesswire.com

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Strategic Education, Inc. and LearnLaunch Partner to Accelerate Innovation in Higher Education and the Future of Work

Oct -30

Source: businesswire.com

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Strategic Education (NASDAQ:STRA) and China Bilingual Technology & Education Group (OTCMKTS:CATG) Head to Head Analysis

Oct -22

Source: defenseworld.net

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Strategic Education: Growth To Accelerate In 2026 Following Temporary Headwinds

Sep -25

Source: seekingalpha.com

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Sophia Learning Announces Partnership with EoS Fitness, Offering Employees at the National Gym Chain Access to Online College-Level Gen Ed Courses

Sep -23

Source: businesswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.51%)

6. Segments

U.S. Higher Education

Expected Growth: 4.5%

Strategic Education, Inc.'s U.S. Higher Education segment growth of 4.5% is driven by increasing demand for online education, strategic acquisitions, and a strong brand reputation. Additionally, the segment benefits from a growing need for workforce development and skills training, as well as a focus on student affordability and flexibility.

Australia/New Zealand

Expected Growth: 4.2%

Strong demand for online education in Australia and New Zealand, driven by a growing working-age population and increasing adoption of online learning platforms. Strategic partnerships with local institutions and government initiatives supporting vocational education and training also contribute to the 4.2% growth.

Education Technology Services

Expected Growth: 5.5%

Strategic Education's Education Technology Services segment growth of 5.5% is driven by increasing demand for online and hybrid learning, strategic partnerships with educational institutions, and expansion of its technology-enabled services. Additionally, the segment benefits from the growing need for workforce development and skills training, as well as the company's investments in artificial intelligence and data analytics.

7. Detailed Products

Strayer University

A private university that offers undergraduate and graduate degree programs in fields such as business, education, and health sciences.

Capella University

An online university that offers undergraduate and graduate degree programs in fields such as business, education, and health sciences.

New York Code + Design Academy

A coding bootcamp that offers immersive training programs in software development and data science.

Sophia Learning

An online learning platform that offers affordable and flexible general education courses for college credit.

Strategic Education Online

A platform that offers online courses and degree programs in partnership with leading universities and organizations.

8. Strategic Education, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Strategic Education, Inc. is medium because while there are some alternative education providers, they are not a significant threat to the company's business model.

Bargaining Power Of Customers

The bargaining power of customers for Strategic Education, Inc. is low because the company has a diverse student base and no single customer has significant bargaining power.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Strategic Education, Inc. is medium because while the company relies on some key suppliers, it has some flexibility to switch to alternative suppliers if needed.

Threat Of New Entrants

The threat of new entrants for Strategic Education, Inc. is high because the education industry is constantly evolving and new online education providers are emerging, posing a threat to the company's market share.

Intensity Of Rivalry

The intensity of rivalry for Strategic Education, Inc. is high because the education industry is highly competitive, and the company faces intense competition from other education providers.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 4.92%
Debt Cost 4.87%
Equity Weight 95.08%
Equity Cost 6.19%
WACC 6.12%
Leverage 5.18%

11. Quality Control: Strategic Education, Inc. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Graham

A-Score: 6.7/10

Value: 7.4

Growth: 7.3

Quality: 6.7

Yield: 2.0

Momentum: 9.0

Volatility: 8.0

1-Year Total Return ->

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Stock-Card
Laureate Education

A-Score: 6.5/10

Value: 3.9

Growth: 5.6

Quality: 7.1

Yield: 5.0

Momentum: 10.0

Volatility: 7.7

1-Year Total Return ->

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Stock-Card
Grand Canyon Education

A-Score: 5.9/10

Value: 3.1

Growth: 6.8

Quality: 8.3

Yield: 0.0

Momentum: 9.5

Volatility: 7.7

1-Year Total Return ->

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Stock-Card
Stride

A-Score: 5.9/10

Value: 7.4

Growth: 8.3

Quality: 7.4

Yield: 0.0

Momentum: 10.0

Volatility: 2.0

1-Year Total Return ->

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Stock-Card
Strategic Education

A-Score: 5.8/10

Value: 6.4

Growth: 4.0

Quality: 6.9

Yield: 6.0

Momentum: 4.0

Volatility: 7.3

1-Year Total Return ->

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Stock-Card
Adtalem Global Education

A-Score: 5.3/10

Value: 3.7

Growth: 7.4

Quality: 7.0

Yield: 0.0

Momentum: 10.0

Volatility: 4.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

80.21$

Current Price

80.21$

Potential

-0.00%

Expected Cash-Flows