Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, aiming to buy high and sell higher, with the expectation that established trends will continue [1] Company Overview: K12 (LRN) - K12 currently holds a Momentum Style Score of B and a Zacks Rank of 1 (Strong Buy), indicating strong potential for outperformance in the market [2][3] - The stock has shown significant price increases, with a 3.78% rise over the past week compared to a 2.13% increase in the Zacks Schools industry [5] - Over the past month, K12's shares have increased by 15.46%, outperforming the industry's 1.95% [5] - In the last quarter, K12 shares rose by 8.2%, and over the past year, they have gained 120.61%, while the S&P 500 has moved -6.91% and 13.12% respectively [6] Trading Volume - K12's average 20-day trading volume is 829,100 shares, which serves as a bullish indicator when combined with rising stock prices [7] Earnings Outlook - Recent earnings estimate revisions have been positive, with three estimates moving higher and none lower, increasing the consensus estimate from $6.67 to $7.09 over the past 60 days [9] - For the next fiscal year, two estimates have also moved upwards without any downward revisions [9] Conclusion - Given the strong performance metrics and positive earnings outlook, K12 is positioned as a promising investment opportunity with a Momentum Score of B [11]

Core Insights - The article emphasizes the importance of quantitative research, financial modeling, and risk management in identifying high-growth investment opportunities [1] - It highlights the significance of combining risk management with long-term value creation in investment strategies [1] Company Analysis - The analyst has over 20 years of experience in equity valuation and market trends, indicating a strong background in assessing company performance [1] - The former Vice President at Barclays has led teams in model validation and stress testing, showcasing expertise in regulatory finance [1] Industry Trends - There is a keen interest in macroeconomic trends and corporate earnings, which are critical for understanding market dynamics [1] - The focus on data-driven insights suggests a growing reliance on quantitative analysis in investment decision-making [1]

K12 (LRN) could be a solid choice for investors given the company's remarkably improving earnings outlook. While the stock has been a strong performer lately, this trend might continue since analysts are still raising their earnings estimates for the company.The upward trend in estimate revisions for this online education company reflects growing optimism of analysts on its earnings prospects, which should get reflected in its stock price. After all, empirical research shows a strong correlation between tre ...

In my last article , I concluded that Stride Inc. ( NYSE: LRN ) was an impressive performer, but the price of around $140 was a bit above fair value at that point. I recommended building positionsI worked for over 10 years at large investment banks and insurance groups, before I chose to be an independent investment analyst. Quantitative analysis is my strength. I filter stocks using a data-driven approach, incorporating both technical and fundamental metrics. After narrowing down the options, I conduct in- ...

Core Insights - K12 Tutoring has achieved Level II validation under the Every Student Succeeds Act (ESSA), confirming its effectiveness in improving student outcomes through personalized academic support [1][2][3] Company Overview - K12 Tutoring is a leading online tutoring service that provides personalized, high-quality tutoring solutions designed to support students' academic journeys [5] - The platform connects students with state-certified educators who create tailored learning plans to address individual academic needs [3][5] Validation and Impact - The independent evaluation conducted in collaboration with Instructure found that students using K12 Tutoring scored an average of 8 percentile points higher on the NWEA MAP Growth math assessment compared to non-tutored peers, equating to approximately eight months of additional classroom learning [2] - K12 Tutoring's ESSA Level II validation highlights its role as an effective academic intervention, providing research-backed solutions for schools and districts [1][3] Tutoring Offerings - K12 Tutoring offers scalable services, including both teacher-assigned and high-dosage tutoring, which are identified as the most effective interventions for accelerating learning progress [3] - The service's flexible scheduling allows families and educators to arrange tutoring sessions at their convenience, making it accessible for students nationwide [3][4]

Market Overview - Wall Street has experienced significant volatility in 2025, with all three major stock indexes (Dow, S&P 500, Nasdaq Composite) in negative territory year to date [1] - Small-cap benchmarks (Russell 2000, S&P 600) and mid-cap-specific S&P 400 Index are also in the red year to date [1] High-Performing Mid-Cap Stocks - Despite market headwinds, five mid-cap stocks have provided over 25% returns year to date: ADMA Biologics Inc. (ADMA), FirstCash Holdings Inc. (FCFS), Stride Inc. (LRN), Life Time Group Holdings Inc. (LTH), and National Fuel Gas Co. (NFG) [2] - These stocks exhibit strong revenue and earnings growth potential for 2025, with positive earnings estimate revisions over the last 60 days [3] ADMA Biologics Inc. - ADMA Biologics specializes in plasma-based biologics for treating and preventing infectious diseases, targeting immune-compromised individuals [7][8] - Expected revenue growth rate is 16.3% and earnings growth rate is 44.9% for the current year, with a 2.9% improvement in earnings estimates over the last 60 days [9] FirstCash Holdings Inc. - FirstCash operates retail pawn stores across the U.S., Mexico, and Latin America, providing loans against personal property and retailing forfeited merchandise [10][11] - Expected revenue growth rate is 0.2% and earnings growth rate is 17.2% for the current year, with a 2.6% improvement in earnings estimates over the last seven days [13] Stride Inc. - Stride is a technology-based education service company offering online curriculum and educational services [14] - Expected revenue growth rate is 14.9% and earnings growth rate is 48.4% for the current year, with a 4.3% improvement in earnings estimates over the last 30 days [16] Life Time Group Holdings Inc. - Life Time provides health, fitness, and wellness experiences, operating various fitness and recreation centers [17][18] - Expected revenue growth rate is 12.9% and earnings growth rate is 37.9% for the current year, with a 6.5% improvement in earnings estimates over the last 60 days [19] National Fuel Gas Co. - National Fuel Gas focuses on systematic investments to strengthen operations and reduce emissions, with significant capital investments planned [20][21] - Expected revenue growth rate is 31.5% and earnings growth rate is 39.1% for the current year, with a 1.9% improvement in earnings estimates over the last 60 days [22][23]

Financial Data and Key Metrics Changes - Total revenue for Q3 was $613.4 million, an increase of 17.8% year-over-year [12] - Adjusted operating income was $141.7 million, up 47% [16] - Adjusted EBITDA reached $168.3 million, up 40% [16] - Gross margins improved to 40.6%, up 190 basis points from last year [15] - Diluted earnings per share for the quarter were $2.20 [16] Business Line Data and Key Metrics Changes - Revenue from career learning, middle, and high school programs grew to $223.9 million, up 33% [12] - General education revenue was $370.8 million, up 13% [12] - Enrollment in career learning programs increased by 34% to 98,700 [12] - Average enrollments rose 14% from last year to 141,500 [13] Market Data and Key Metrics Changes - Enrollment was up over 21% from last year, setting the company up for continued growth [11] - Demand for full-time online programs remains strong, with 27% of parents considering such options [6] - Application volumes have grown significantly, almost doubling compared to two years ago and quadrupling compared to four years ago [9] Company Strategy and Development Direction - The company aims to leverage its core capabilities to deliver innovative, outcomes-driven solutions for over 50 million students [9] - Focus on building an enduring business for the next 25 years while celebrating its 25th anniversary [8] - Plans to invest in tutoring and socialization opportunities for students in online programs [61][29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in finishing the year with more enrollments than started, marking the third consecutive year of growth [11] - The macro environment remains favorable, with strong demand trends supporting future growth [6] - Management noted a generally favorable funding environment for FY 2026 [14] Other Important Information - The company raised its full-year revenue guidance to a range of $2.37 to $2.385 billion, up from $2.32 to $2.355 billion [18] - Capital expenditures for the quarter were $15.8 million, slightly down from $16.3 million [17] - Free cash flow was $37.3 million, down from $52.2 million due to timing of cash receipts [17] Q&A Session Summary Question: Strong enrollment growth in Career Learning program - Management acknowledged ongoing tests to develop a separate funnel for career learning but noted challenges in cracking the code [20][22] Question: Improving socialization opportunities for online students - Management discussed initiatives like the K-12 zone and geographic pods to enhance socialization for students [24][26] Question: Marketing strategy and spend - Management indicated that marketing strategies will remain consistent, focusing on testing and optimizing media placements without significantly increasing spend [34][38] Question: Impact of federal policies on demand - Management expressed confidence that the current administration's focus on choice will positively impact demand, particularly at the state level [41] Question: Growth in Career Learning and missed opportunities in lower grades - Management highlighted strong growth in middle and high school but acknowledged the need to improve communication and offerings in lower grades [46][47] Question: Constraints on enrollment due to school policies - Management confirmed that some schools have closed enrollment windows, impacting the ability to meet demand [50][51] Question: Future gross margin expansion - Management indicated that while gross margins are currently strong, they do not expect significant increases beyond current levels [59][60]

Financial Performance - Q3 FY25 revenue reached $613.4 million, an 18% year-over-year increase[9] - Adjusted Operating Income for Q3 FY25 was $141.7 million, a 47% year-over-year increase[9] - Adjusted EBITDA for Q3 FY25 was $168.3 million, a 40% year-over-year increase[9] - Revenue for the first nine months of FY25 reached $1751.7 million, a 16% year-over-year increase[9] - Adjusted Operating Income for the first nine months of FY25 was $335.7 million, a 63% year-over-year increase[9] - Adjusted EBITDA for the first nine months of FY25 was $412.6 million, a 48% year-over-year increase[9] Enrollment Trends - Average Q3 enrollments reached 240200, up 21.1% from the prior year[7] - General Education enrollments increased by 16900, up 14% year-over-year[17] - Career Learning enrollments increased by 24900, up 34% year-over-year[17] Guidance and Targets - The company increased its full-year revenue guidance to a range of $2370 billion to $2385 billion[18] - The company increased its full-year Adjusted Operating Income guidance to a range of $455 million to $465 million[18]

Company Performance - K12 reported quarterly earnings of $2.02 per share, missing the Zacks Consensus Estimate of $2.09 per share, but showing an increase from $1.60 per share a year ago, representing an earnings surprise of -3.35% [1] - The company posted revenues of $613.38 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 3.31%, compared to year-ago revenues of $520.84 million [2] - Over the last four quarters, K12 has surpassed consensus EPS estimates three times and topped consensus revenue estimates four times [2] Stock Performance - K12 shares have increased approximately 35.5% since the beginning of the year, contrasting with a -6% decline in the S&P 500 [3] - The current consensus EPS estimate for the coming quarter is $1.71 on revenues of $610.89 million, and for the current fiscal year, it is $6.96 on revenues of $2.34 billion [7] Industry Outlook - The Schools industry, to which K12 belongs, is currently in the top 20% of over 250 Zacks industries, indicating a favorable outlook [8] - Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions, suggesting that K12's stock may outperform the market in the near future [5][6]

Revenue Growth - For the nine months ended March 31, 2025, revenues increased to $1,751.7 million, up 16.3% from $1,505.9 million in the prior year[166] - Revenues for the three months ended March 31, 2025, were $613.4 million, an increase of $92.6 million, or 17.8%, from $520.8 million in the same period of 2024[184] - General Education revenues for the nine months ended March 31, 2025, were $1,054.5 million, an increase of 11.9% from $942.1 million in the prior year[176] - Career Learning revenues increased by 23.7% to $697.1 million for the nine months ended March 31, 2025, compared to $563.8 million in the prior year[176] - General Education revenues for the three months ended March 31, 2025, were $370.8 million, a 12.7% increase from $328.9 million in the prior year[176] - Career Learning revenues for the same period were $242.6 million, reflecting a 26.4% increase from $191.9 million in the prior year[176] Enrollment Statistics - Total enrollments for the nine months ended March 31, 2025, reached 233.5 thousand, an increase of 38.9 thousand or 20.0% over the prior year[166] - General Education revenues increased by $41.9 million, or 12.7%, year over year, driven by a 13.6% increase in enrollments[184] - Career Learning revenues rose by $50.6 million, or 26.4%, primarily due to a 33.7% increase in enrollments[184] - Stride graduated 15,987 high school students from partner schools in the most recent academic year ended June 30, 2024[158] Financial Performance - Operating income for the same period rose to $303.2 million, compared to $175.9 million in the prior year, driven by revenue growth and an increase in gross margin[166] - Net income attributable to common stockholders for the three months ended March 31, 2025, was $99.3 million, or 16.2% of revenues, compared to $69.7 million, or 13.4% of revenues, in the prior year[183] - Operating income for the nine months ended March 31, 2025, increased to $303.2 million, up from $175.9 million in the prior year, driven by revenue growth and an increase in gross margin[166] Expenses - Instructional costs and services expenses for the three months ended March 31, 2025, were $364.1 million, an increase of $44.6 million, or 14.0%, from $319.5 million in the prior year[185] - Selling, general, and administrative expenses for the three months ended March 31, 2025, were $118.5 million, an increase of $5.5 million, or 4.9%, from $113.0 million in the prior year[186] - Instructional costs and services expenses for the nine months ended March 31, 2025, were $1,046.7 million, an increase of $116.2 million, or 12.5%, from $930.5 million in the prior year[192] Cash Flow and Working Capital - The company had net working capital of $1,243.4 million as of March 31, 2025, including cash and cash equivalents of $528.6 million and accounts receivable of $699.8 million[197] - Net cash provided by operating activities increased by $27.9 million to $134.5 million for the nine months ended March 31, 2025, compared to $106.6 million for the same period in 2024[206] - Net cash used in investing activities decreased by $47.7 million to $53.3 million for the nine months ended March 31, 2025, compared to $101.0 million for the same period in 2024[208] - Net cash used in financing activities increased by $10.8 million to $50.6 million for the nine months ended March 31, 2025, compared to $39.8 million in the prior year[209] Investments and Agreements - Stride has invested over $700 million in the last twenty years to develop curriculum, systems, instructional practices, and support services[177] - The average duration of agreements for the school-as-a-service offering is greater than five years, with most providing for automatic renewals[164]