Core Viewpoint - The analysis presents a bullish outlook on Stride (NYSE: LRN), identifying it as an interesting investment opportunity and recommending a "buy" rating based on its growth potential and strong financials [1]. Group 1: Investment Thesis - The company is positioned favorably within the market, with a strong growth narrative supported by robust financial statements [1]. - The analyst emphasizes a focus on stocks that exhibit both growth and quality factors, indicating a preference for companies that demonstrate a solid growth story alongside strong financial health [1]. Group 2: Analyst Background - The analyst has 10 years of experience in investment banking and has passed all CFA Program exams, suggesting a high level of expertise in evaluating investment opportunities [1].

Core Insights - The homeschooling population in the United States reached approximately 3.7 million students in 2024, representing about 6.73% of school-age children, which has roughly doubled since 2012 [1] Group 1: Homeschooling Trends - The increase in homeschooling reflects a growing demand for flexible and accessible learning options among families [1]

Market Overview - A recent ruling by the U.S. trade court declared President Trump's global tariffs illegal, contributing to a new wave of market uncertainty [1] - The Federal Reserve's current wait-and-see approach adds to the uncertainty regarding future interest rate directions [1] Investment Strategy - Creating a curated portfolio of low-beta stocks is recommended as a strategy to navigate market volatility [1] - Low-beta stocks are less volatile than the market, providing a safeguard against uncertainty [1] Stock Recommendations - Suggested stocks include Natural Gas Services Group Inc (NGS), Stride Inc. (LRN), AptarGroup Inc. (ATR), and Philip Morris International Inc. (PM) [2] Stock Characteristics - Beta measures the volatility of a stock relative to the market, with a beta of 1 indicating movement in line with the market [3][4] - Stocks with a beta between 0 and 0.6 are screened for lower volatility [5] Screening Criteria - Stocks must have a positive price change over the last four weeks [5] - Average 20-day trading volume should exceed 50,000 to ensure liquidity [6] - Stocks must be priced at $5 or higher [6] - Zacks Rank of 1 indicates strong buy potential, suggesting significant outperformance over the next one to three months [6] Company Insights - **Natural Gas Services (NGS)**: Increased demand for liquefied natural gas (LNG) exports is driving the need for compression equipment, benefiting NGS as more pipelines are built [7] - **AptarGroup (ATR)**: Positioned for growth due to trends in healthcare moving towards home settings and rising demand for drug delivery systems [8] - **Stride Inc. (LRN)**: Focuses on innovative educational solutions, benefiting from the growing demand for school choice and tutoring services [10] - **Philip Morris International (PM)**: Transitioning from traditional cigarettes to smoke-free products, with a focus on shareholder rewards and cost-cutting initiatives [11]

Core Insights - K12, a brand under Stride, Inc., received two Gold Stevie® Awards for its achievements in virtual learning and game-based curriculum, highlighting its commitment to transforming education through personalized and engaging experiences [1][4] Group 1: Awards and Recognition - K12 Skills Arcade won the Gold Stevie award for its Game-Based Curriculum Solution, featuring an adaptive learning platform that utilizes interactive gamified lessons for students from preschool to 12th grade [2] - K12-powered schools were awarded the Gold Stevie for their Virtual Learning Solution, having served over 3 million students in the U.S. over the past 25 years, with a 91% parent satisfaction rate [3] Group 2: Educational Approach and Commitment - The company emphasizes innovative approaches such as gamified learning and flexible virtual schools, aiming to provide high-quality, future-ready education tailored to individual student needs [4] - Stride, Inc. is focused on redefining lifelong learning with a variety of educational solutions, reaching learners in all 50 states and over 100 countries [5]

Group 1 - Stride Inc. has been named "Stock to Study" by BetterInvesting Magazine for August 2025, indicating potential interest from investors regarding its valuation [1][2] - The upcoming report will provide comprehensive fundamental data on Stride, including sales, earnings, pre-tax profit, and return on equity [2] - The same issue will also feature a fundamental review of Amgen Inc., which is considered undervalued by the Editorial Advisory and Securities Review Committee [3] Group 2 - The Editorial Advisory and Securities Review Committee consists of several CFA members, indicating a level of expertise in their evaluations [3] - BetterInvesting is a nonprofit organization focused on investment education, having empowered over 5 million individuals since its inception in 1951 [5]

Industry Overview - The Zacks Schools industry is experiencing a rebound driven by increased demand for career-focused programs in healthcare, skilled trades, cybersecurity, and IT, supported by a labor market that values job-ready skills and government initiatives promoting non-degree pathways [1][4] - The industry is addressing the critical shortage of healthcare workers through rigorous, workforce-aligned training programs [5] Trends Influencing the Industry - Digital innovation is a key driver of differentiation, with companies investing in adaptive learning tools and scalable online platforms to enhance engagement and support flexible learning for working adults [2][7] - There is a rising demand for workforce-oriented programs, particularly among adult learners and career switchers, as the labor market increasingly values job-ready skills over traditional degrees [4] - The sector is witnessing consolidation, with larger players acquiring niche or financially weaker institutions to expand offerings and improve scale [6] Financial Performance and Market Position - The Zacks Schools industry currently ranks 30 within the broader Zacks Consumer Discretionary sector, placing it in the top 12% of over 250 Zacks industries, indicating strong near-term prospects [10][11] - The industry's earnings estimates for 2025 have increased to $1.38 per share from $1.37 since April 2025, reflecting growing analyst confidence in the group's earnings growth potential [12] Enrollment and Revenue Growth - For-profit providers are expected to see enrollment and revenue growth in 2025, driven by demographic tailwinds, state and federal support for vocational education, and digital innovation [2] - Companies like Stride, Inc., Laureate Education, Inc., and American Public Education, Inc. are positioned to benefit from these trends, with significant enrollment growth reported [21][29][25] Valuation Metrics - The industry is currently trading at a forward 12-month price-to-earnings ratio of 16.86X, compared to the S&P 500's 21.81X and the sector's 19.73X, indicating potential undervaluation [17][20] Company Highlights - Stride, Inc. reported a 20% rise in total enrollment, with a 12.8% increase in General Education and a 32% increase in Career Learning [21] - American Public Education has seen a 60.2% stock increase over the past year, with earnings expected to grow 150.9% in 2025 [25] - Laureate Education's fully online programs account for about 20% of its student base, growing at three to four times the pace of face-to-face programs [28] - Perdoceo Education has benefited from a 10.6% enrollment increase at Colorado Technical University, driven by strong student engagement [32] - Lincoln Educational Services has achieved an 82.4% stock increase over the past year, supported by strong enrollment growth and operational efficiencies [36]

Core Viewpoint - Stride, Inc. (LRN) has demonstrated strong stock performance with a 48.7% increase year-to-date, significantly outperforming the Zacks Schools industry and the broader market [1][3]. Enrollment Growth - The company has experienced record enrollment growth, particularly in its Career Learning segment, with overall enrollment increasing by 20% year-over-year [4][5]. - Enrollment in General Education grew by 12.8% to 137,500 students, while Career Learning enrollment surged by 32% to 96,000 students [4]. Revenue Performance - Stride's total revenues for the first nine months of fiscal 2025 reached $1.75 billion, reflecting a 16.3% year-over-year growth [5]. - The company has raised its fiscal 2025 revenue guidance to between $2.37 billion and $2.385 billion, indicating a year-over-year increase of 16.2% to 16.9% from $2.04 billion reported in fiscal 2024 [7]. Future Outlook - Stride is focusing on achieving its fiscal 2028 targets, projecting revenues between $2.70 billion and $3.30 billion, which represents a 10% compound annual growth rate (CAGR) from fiscal 2023 [10]. - Adjusted operating income is expected to be between $415 million and $585 million, with a projected CAGR of 20% [10]. Market Trends - The demand for career education and online program alternatives is driving Stride's growth, supported by its diverse product offerings and strategic initiatives [2][4]. - The favorable regulatory environment under the current administration is expected to further benefit Stride's business model [11]. Earnings Estimates - Analysts have revised fiscal 2025 and 2026 earnings estimates upward, with fiscal 2025 indicating a 51.2% year-over-year growth rate [12]. - Current earnings per share (EPS) estimates for fiscal 2025 are projected at $7.09, with a rise to $7.76 in fiscal 2026 [13]. Valuation - Stride is currently trading at a premium compared to its industry peers based on a forward 12-month price-to-earnings (P/E) ratio, reflecting strong market potential [17]. Investment Considerations - The combination of robust enrollment growth, strategic initiatives, and favorable market trends positions Stride well for future profitability [19][20]. - Investors are encouraged to consider adding Stride to their portfolios based on the positive technical indicators and market demand trends [21].

Group 1 - The article highlights the availability of high-quality analysis on Wall Street buying and selling ideas through a subscription service called Beyond the Wall Investing [1] - Daniel Sereda, the chief investment analyst, manages investments across various asset classes and regions, emphasizing the importance of filtering vast amounts of data for critical insights [1] - The investing group provides access to information prioritized by institutional market participants, enhancing the quality of investment analysis [1] Group 2 - The article does not provide specific company or industry-related content beyond the general information about the investment analysis service [2]

Core Points - K12, a brand under Stride, Inc., has launched its 19th Annual Art Competition, offering a total of $15,000 in prizes for students from kindergarten to 12th grade [1][5] - The competition encourages creativity and student expression, accepting submissions in various visual art forms, including painting, drawing, photography, sculptures, and collages [2][4] - Finalists will present their work live via Zoom, allowing for a new way to showcase physical artwork [2] - Judging will occur by individual grade level, with first-place, second-place, and People's Choice winners for each grade [2][3] - The competition aims to provide a national platform for young artists to express themselves and gain recognition for their talents [5] Key Details & Dates - Submissions are open from May 13 to August 25, with public voting for People's Choice Awards from August 26 to September 26 [7] - Winners will be announced on October 22 [7] - Participation is free for students in public, private, charter, or homeschool programs across the United States [7]

Group 1 - K12 Tutoring has been approved as a vendor for the Oregon Department of Education's High-Dosage Tutoring program, aimed at providing individualized tutoring services to young learners in Oregon [1] - The Oregon Department of Education has allocated $90 million in grants to improve early literacy, responding to the low rankings of Oregon elementary and middle school students in math and reading [2] - High-dosage tutoring is recognized as an effective method to close learning gaps and accelerate academic growth, utilizing certified teachers and personalized learning plans [3] Group 2 - K12 Tutoring manages logistics, staffing, training, and communication, allowing school district leaders to focus on their priorities while aligning programs with district curriculum and standards [4] - K12 Tutoring offers flexible online tutoring services with state-certified tutors, personalized learning plans, and a wide range of subjects to support students' academic journeys [5]