GICS Sector : Consumer Defensive
Stride, Inc., a technology-based education service company, provides proprietary and third-party online curriculum, software systems, and educational services to facilitate individualized learning for students primarily in kindergarten through 12th grade (K-12) in the United States and internationally.Its technology-based products and services enable clients to attract, enroll, educate, track progress, and support students.The company offers integrated package of systems, services, products, and professional expertise to support a virtual or blended public school; individual online courses and supplemental educational products; and products and services for the general education market focused on subjects, including math, English, science, and history for kindergarten through twelfth grade students.
Stride's financial performance in the first quarter of FY2026 was a mixed bag, with revenue coming in at $620.9 million, up 13% from the same period last year, and adjusted operating income increasing by 39% to $81.1 million. The company's adjusted earnings per share (EPS) was $1.52, beating estimates of $1.23. The revenue growth was driven by a strong demand for Stride's products and services, with the count date enrollment increasing by 11.3% year-over-year to 247,700 students. However, the company fell short of internal enrollment expectations due to strategic decisions that will pay dividends in the long term.
Publication Date: Nov -01
The company's operational performance was impacted by the rollout of its new learning and technology platforms, which caused some disruption and higher withdrawal rates. According to James Rhyu, CEO, the implementation took longer than expected and encountered more problems during the rollout, affecting the customer experience. The company estimates that it lost around 10,000 to 15,000 students due to these issues, mainly between mid-August and September 30.
Stride's guidance for the second quarter of 2026 includes revenue of $620 million to $640 million, adjusted operating income of $135 million to $145 million, and capital expenditures of $15 million to $18 million. For the full year, the company expects revenue of $2.480 billion to $2.555 billion, adjusted operating income of $475 million to $500 million, and capital expenditure of $70 million to $80 million. Analysts estimate next year's revenue growth at 6.7%, which is slightly above the company's long-term outlook.
Stride's current valuation metrics suggest that the market has a positive outlook on the company. The stock's P/E Ratio is 9.34, P/B Ratio is 1.93, and P/S Ratio is 1.21. The company's Return on Equity (ROE) is 22.0%, and Return on Invested Capital (ROIC) is 13.58%. These metrics indicate that Stride is generating strong returns on its investments, and the market is pricing in a reasonable valuation multiple.
Stride's competitive position remains strong, with the company outpacing its largest competitor in raw growth numbers. James Rhyu stated that while competitors are doing well, Stride welcomes healthy competition and believes that demand remains strong. The company's focus on upgrading its platforms and improving customer experience will be crucial in maintaining its competitive edge.
Contact Levi & Korsinsky by January 12, 2026 Deadline to Join Class Action Against Stride, Inc.(LRN)
Dec -04
INVESTOR ALERT: The Stride, Inc. Securities Fraud Class Action is Pending, Investors Urged to Contact BFA Law by January 12 Deadline
Dec -04
DEADLINE ALERT for LRN, PRMB, FCX, and PRGO: The Law Offices of Frank R. Cruz Reminds Investors of Class Actions on Behalf of Shareholders
Dec -04
LRN INVESTOR ALERT: Bronstein, Gewirtz & Grossman LLC Announces that Stride, Inc. Investors with Substantial Losses Have Opportunity to Lead Class Action Lawsuit
Dec -04
Stride is Trading at a Discount: Right Time to Buy the Stock?
Dec -04
Stride Shareholder Alert: ClaimsFiler Reminds Investors With Losses In Excess Of $100,000 Of Lead Plaintiff Deadline In Class Action Lawsuits Against Stride, Inc. - LRN
Dec -04
Portnoy Law Firm Announces Class Action on Behalf of Stride, Inc. Investors
Dec -04
Lost Money on Stride, Inc.(LRN)? Join Class Action Suit Seeking Recovery - Contact The Gross Law Firm
Dec -04
Stride's General Education segment growth is driven by increasing demand for online and blended learning, strategic partnerships with schools and districts, and expansion of product offerings. Additionally, the company's focus on personalized learning, teacher support, and student outcomes has led to strong customer retention and acquisition, contributing to an 8% growth rate.
Stride's Career Learning - Middle - High School segment growth is driven by increasing demand for online education, rising adoption of personalized learning, and growing need for career readiness. Additionally, Stride's strong brand reputation, expanding partnerships with schools and districts, and investments in technology and content development contribute to its 9% growth.
Stride's Career Learning - Adult segment growth is driven by increasing demand for online education, rising need for skill enhancement, and growing adoption of online learning platforms. Additionally, the segment benefits from Stride's strong brand recognition, strategic partnerships, and expanding course offerings, leading to a 10% growth rate.
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Stride, Inc. faces moderate threat from substitutes due to the availability of alternative fitness options such as jogging, yoga, and other forms of exercise.
Customers have high bargaining power due to the availability of multiple fitness options, making it easy for them to switch to competitors.
Stride, Inc. has a strong bargaining power over its suppliers due to its large market share and ability to negotiate better prices.
The threat of new entrants is moderate due to the high capital requirements and regulatory barriers to entry in the fitness industry.
The fitness industry is highly competitive, with many established players and new entrants, leading to a high intensity of rivalry.
| Value | |
|---|---|
| Debt Weight | 36.47% |
| Debt Cost | 3.95% |
| Equity Weight | 63.53% |
| Equity Cost | 5.28% |
| WACC | 4.79% |
| Leverage | 57.41% |
Value: 7.4
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Volatility: 8.0
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