Financial Performance - Revenues for Q2 FY 2026 reached $631.3 million, a 7.5% increase from $587.2 million in Q2 FY 2025[4] - Net income for Q2 FY 2026 was $99.5 million, up 3.2% from $96.4 million in Q2 FY 2025[6] - Adjusted EBITDA for Q2 FY 2026 was $188.1 million, reflecting a 17.2% increase compared to $160.4 million in Q2 FY 2025[4] - Income from operations for Q2 FY 2026 was $146.9 million, up from $125.1 million in Q2 FY 2025, representing a 17.0% increase[38] - Adjusted operating income for Q2 FY 2026 reached $159.0 million, compared to $135.6 million in Q2 FY 2025, reflecting a 17.2% growth[38] - Adjusted EBITDA for Q2 FY 2026 was $188.1 million, compared to $160.4 million in Q2 FY 2025, marking a 17.3% rise[41] - The company projects income from operations for FY 2026 to be between $437.0 million and $454.0 million[43] - Adjusted operating income for FY 2026 is expected to range from $485.0 million to $505.0 million[43] Enrollment Metrics - Total enrollments in Q2 FY 2026 were 248.5K, a 7.8% increase from 230.6K in Q2 FY 2025[10] - Career Learning enrollments increased by 17.6% to 111.5K in Q2 FY 2026 compared to 94.8K in Q2 FY 2025[10] - Revenue per enrollment for Q2 FY 2026 was $2,437, up 1.8% from $2,395 in Q2 FY 2025[12] Forecast and Projections - The company forecasts FY 2026 revenue in the range of $2.480 billion to $2.555 billion[19] - Adjusted operating income for FY 2026 is projected to be between $485 million and $505 million[19] - Capital expenditures for FY 2026 are expected to be between $70 million and $80 million[19] - The effective tax rate is anticipated to be between 24% and 25% for FY 2026[19] Cash and Assets - Total current assets as of December 31, 2025, were $1,600,317,000, slightly down from $1,632,734,000 as of June 30, 2025[26] - Total liabilities decreased to $758,709,000 as of December 31, 2025, from $814,340,000 as of June 30, 2025, showing a reduction of 6.8%[27] - Cash and cash equivalents at the end of the period were $497,098,000, down from $782,497,000 at the beginning of the period, a decrease of 36.5%[29] Earnings and Share Metrics - Basic earnings per share for the three months ended December 31, 2025, was $2.31, up from $2.24 in the same period of 2024, a growth of 3.1%[24] - Adjusted earnings per share for Q2 FY 2026 was $2.50, up from $2.37 in Q2 FY 2025, which is a 5.5% increase[41] - Stock-based compensation expense for Q2 FY 2026 was $10.3 million, compared to $7.9 million in Q2 FY 2025, a 30.0% increase[41] - The weighted average diluted shares for Q2 FY 2026 were 46,863,391, compared to 47,462,688 in Q2 FY 2025[41] Cash Flow and Operating Activities - The company reported a net cash used in operating activities of $103,944,000 for the six months ended December 31, 2025, compared to a net cash provided of $81,360,000 in 2024[30] - The company has capitalized software development costs of $24,691,000 for the six months ended December 31, 2025, compared to $18,601,000 in 2024, indicating an increase of 32.8%[30] Gross Margin - Gross margin for the six months ended December 31, 2025, was $501,754,000, up from $455,711,000 in 2024, indicating a year-over-year growth of 10.1%[24]

RESTON, Va., Jan. 27, 2026 (GLOBE NEWSWIRE) -- Stride, Inc. (NYSE: LRN), one of the nation’s most successful technology-based education companies, today announced its results for the second quarter of fiscal year 2026 ended December 31, 2025. Second Quarter Fiscal 2026 Highlights Compared to 2025 Revenue of $631.3 million, compared with $587.2 millionIncome from operations of $146.9 million, compared with $125.1 millionNet income of $99.5 million, compared with $96.4 millionDiluted net income per share of $ ...

Stride, Inc. (NYSE: LRN) is a prominent figure in the online education sector, offering comprehensive education programs for a wide range of students and adults. As it gears up to announce its quarterly earnings on January 27, 2026, the market is abuzz with anticipation. Analysts have set high expectations for the company's financial performance, projecting significant earnings per share and revenue. However, Stride finds itself under scrutiny due to a legal investigation concerning its board of directors' ...

Core Viewpoint - Bragar Eagel & Squire, P.C. is investigating potential claims against Stride, Inc. due to allegations of fiduciary duty breaches by the board of directors during a specified class period [2]. Group 1: Legal Investigation - A class action complaint was filed against Stride on November 11, 2025, concerning actions taken between October 22, 2024, and October 28, 2025 [2]. - The investigation focuses on whether Stride's board of directors has breached their fiduciary duties to the company [2]. Group 2: Allegations Against Stride - The complaint alleges that Stride made false and misleading statements about its success and capabilities in the education sector [8]. - Specific allegations include: 1. Inflating enrollment numbers by retaining "ghost students" [8]. 2. Cutting staffing costs by assigning teachers excessive caseloads beyond statutory limits [8]. 3. Ignoring compliance requirements, including background checks and licensure laws for employees, and federally mandated special education services [8]. 4. Suppressing whistleblowers who reported financial directives aimed at delaying hiring and denying services to maintain profit margins [8]. 5. Losing existing and potential enrollments due to these practices [8]. - These materially false statements led to the purchase of securities at artificially inflated prices, resulting in damages when the truth was revealed [8].

Group 1 - The sell-off of Stride, Inc. (LRN) stock has exceeded 50% since its pre-Q1 peak, suggesting that the decline may be overdone based on primary research [1] - Ariel Sokol, with over twenty years of experience in corporate finance, has a background in both established companies and startups, particularly in the education sector [1] - Sokol founded Kolari Consulting, focusing on subscription and edtech businesses, and has held significant roles at Pearson in the Connections Education division [1] Group 2 - Sokol has experience as a Wall Street equity research analyst covering education, software, and media companies, indicating a strong analytical background [1] - His previous role on the board of a for-profit university adds to his expertise in the education industry [1]

Core Viewpoint - The Law Offices of Frank R. Cruz is investigating potential claims against the board of directors of Stride, Inc. regarding possible breaches of fiduciary duties to shareholders [1] Group 1: Legal Investigation - The investigation is prompted by a report from Simply Wall St. published on September 14, 2025, which indicates that the Gallup-McKinley County Schools Board of Education has filed a complaint against Stride, alleging fraud and deception [1]

Core Insights - The article emphasizes the importance of conducting personal due diligence before making investment decisions, highlighting that past performance does not guarantee future results [2][3]. Group 1 - The content is based on personal thoughts and research, indicating that it is not financial or investment advice [2][3]. - The article mentions that the author has no business or personal relationship with any company mentioned, ensuring objectivity in the analysis [2][3]. - It is noted that the analysts contributing to the platform may not be licensed or certified, which could affect the reliability of the information provided [3].

Core Viewpoint - The article emphasizes the importance of conducting personal due diligence before making investment decisions, highlighting that past performance does not guarantee future results [2][3]. Group 1 - The content is based on personal thoughts and research, and it is not intended as financial or investment advice [2][3]. - The author has no stock, option, or similar derivative positions in any of the companies mentioned, nor plans to initiate any such positions within the next 72 hours [1]. - There is a clear disclaimer that the views expressed may not reflect those of Seeking Alpha as a whole, indicating a diversity of opinions among analysts [3].

Core Insights - The article emphasizes that while sales and earnings are important metrics for evaluating a company, they may not be sufficient for long-term investment decisions. A deeper analysis of a company's financial health and stability is necessary for sustainable growth [1] Financial Analysis - A critical analysis of a company's financial background is essential for informed investment decisions, with coverage ratios being a key focus. The Interest Coverage Ratio is highlighted as a crucial indicator of a company's ability to meet its debt interest obligations [2][4] - The Interest Coverage Ratio is calculated as Earnings before Interest & Taxes (EBIT) divided by Interest Expense, and companies like Amazon, Stride, Brinker International, and Cardinal Health have strong ratios [3] Importance of Interest Coverage Ratio - The Interest Coverage Ratio indicates how effectively a company can pay interest on its debt, with a ratio below 1.0 suggesting potential default risks. Companies generating earnings significantly above their interest expenses are better positioned to withstand financial difficulties [5][7] Investment Strategy - A winning investment strategy includes selecting stocks with an Interest Coverage Ratio above the industry average, a favorable Zacks Rank, and a VGM Score of A or B, which can lead to better investment outcomes [8][11] - Stocks that meet criteria such as a minimum price of $5, strong historical and projected EPS growth, and substantial trading volume are more likely to perform well [9][11] Company Performance - Amazon has a Zacks Rank of 2, a VGM Score of B, and a trailing four-quarter earnings surprise of 22.5%, with projected sales and EPS growth of 12% and 29.7% respectively [10][12] - Stride also holds a Zacks Rank of 2 and a VGM Score of B, with projected sales and EPS growth of 4.6% and 3.1% respectively, despite a stock decline of 38.8% over the past year [12][13] - Brinker International has a Zacks Rank of 2 and a VGM Score of A, with projected sales and EPS growth of 6.5% and 14.9% respectively, and a stock increase of 15.7% in the past year [13][14] - Cardinal Health leads with a Zacks Rank of 2 and a VGM Score of A, showing a stock performance increase of 69.1% and projected sales and EPS growth of 16.3% and 20% respectively [10][14][15]

Core Viewpoint - Stride (NYSE: LRN) stock is currently undervalued, expanding, and generating cash, making it an attractive investment opportunity for market participants [2]. Company Performance - LRN is trading at a significant discount compared to its highs over the past 3 months, 1 year, and 2 years, primarily due to platform implementation challenges in mid-2025, which resulted in 10,000-15,000 fewer enrollments and increased expenses [3]. - Despite recent challenges, LRN has shown strong demand, with Career Learning enrollments increasing by 20% in Q1 FY26 [4]. - The company maintains a robust balance sheet with $749.6 million in cash and a low debt-to-equity ratio of 0.32 [4]. - Revenue expectations for fiscal 2026 are projected between $2.48 billion and $2.555 billion, indicating resilience in the face of challenges [4]. Financial Metrics - LRN offers a cash flow yield of 10.4% and has experienced a revenue surge of 17.3% over the last twelve months, suggesting continued growth in cash reserves [8]. - The stock is currently priced at 55% less than its 3-month peak, 59% below its 1-year high, and 59% below its 2-year peak, reflecting a significant valuation discount [8]. Investment Considerations - The company has a market cap exceeding $2 billion, positive revenue growth, and a high free cash flow yield, making it a compelling investment option [9]. - Historical performance indicates average returns of 25.7% and 57.9% for the 6-month and 12-month periods, respectively, with a win rate of over 70% for both durations [9].