Core Viewpoint - The article compares Strategic Education (STRA) and Universal Technical Institute (UTI) to determine which stock is more attractive to value investors [1] Group 1: Zacks Rank and Analyst Outlook - STRA has a Zacks Rank of 2 (Buy), indicating a positive earnings estimate revision trend, while UTI has a Zacks Rank of 3 (Hold) [3] - STRA's improving analyst outlook suggests a more favorable investment opportunity compared to UTI [3] Group 2: Valuation Metrics - STRA has a forward P/E ratio of 15.09, significantly lower than UTI's forward P/E of 32.64 [5] - STRA's PEG ratio is 1.01, while UTI's PEG ratio is 2.18, indicating STRA is more reasonably priced relative to its expected earnings growth [5] - STRA's P/B ratio is 1.26, compared to UTI's P/B of 6.39, further highlighting STRA's valuation advantage [6] Group 3: Value Grades - STRA has a Value grade of A, while UTI has a Value grade of C, reflecting STRA's superior valuation metrics and earnings outlook [6]

Strategic Education, Inc. (STRA) , or SEI, reported impressive results for the first quarter of 2025. Its adjusted earnings and revenues topped the Zacks Consensus Estimate. On a year-over-year basis, both the top and bottom lines increased.The quarter witnessed robust employer-affiliated enrollment, strong growth from Sophia Learning subscriptions and continued enrollment growth in the U.S. Higher Education (“USHE”) segment.Inside STRA’s HeadlinesThe company reported adjusted earnings per share (EPS) of $1 ...

Enrollment and Retention - In Q1 2025, USHE enrollment increased to 87,854 compared to 87,731 in Q1 2024, reflecting a growth in student numbers [127]. - Trailing 4-quarter student persistence within USHE was 87.2% in Q4 2024, up from 87.0% in Q4 2023, indicating improved retention rates [127]. - Employer-affiliated enrollment as a percentage of USHE enrollment rose to 31.2% in Q1 2025 from 29.2% in Q1 2024, highlighting the effectiveness of employer partnerships [128]. - Total enrollment in the USHE segment increased to 87,854 in Q1 2025, up from 87,731 in Q1 2024, while enrollment in the Australia/New Zealand segment decreased to 20,082 from 20,197 [146]. Financial Performance - Revenue for Q1 2025 was $303.6 million, up from $290.3 million in Q1 2024, representing an increase of 4.5% [145]. - Adjusted income from operations for Q1 2025 was $41.7 million, up from $35.8 million in Q1 2024, representing a 10.9% increase [160]. - Adjusted net income for Q1 2025 was $31.2 million, compared to $26.7 million in Q1 2024, reflecting a 16.8% growth [160]. - Revenues for Q1 2025 were $303.6 million, an increase from $290.3 million in Q1 2024, marking a 4.4% rise [160]. - Operating margin improved to 13.7% in Q1 2025 from 12.4% in Q1 2024 [160]. Costs and Expenses - Income from operations decreased to $39.8 million in Q1 2025 from $41.4 million in Q1 2024, primarily due to higher restructuring costs and operating expenses [152]. - Consolidated instructional and support costs increased to $158.3 million in Q1 2025, but as a percentage of revenues, it decreased to 52.1% from 54.3% in Q1 2024 [147][149]. - General and administration expenses rose to $103.6 million in Q1 2025, with the percentage of revenues increasing to 34.1% from 33.3% in Q1 2024 [150]. - Restructuring costs increased to $1.9 million in Q1 2025 compared to a net benefit of $5.5 million in Q1 2024, primarily due to increased severance and personnel-related expenses [151]. Cash Flow and Dividends - Cash, cash equivalents, and marketable securities totaled $197.6 million as of March 31, 2025, down from $253.6 million a year earlier [163]. - Net cash provided by operating activities decreased to $67.7 million in Q1 2025 from $77.6 million in Q1 2024, a decline of 12.8% [165]. - Net cash used in financing activities increased to $56.1 million in Q1 2025, compared to $18.4 million in Q1 2024, primarily due to $32.0 million in share repurchases [168]. - The Board of Directors declared a quarterly cash dividend of $0.60 per share, totaling $14.8 million in cash dividends paid in Q1 2025 [169]. Revenue Sources and Risks - Approximately 94% of revenues for the three months ended March 31, 2025, consisted of tuition revenue, underscoring the reliance on tuition as a primary revenue source [133]. - Revenues from foreign currencies accounted for 15.9% of consolidated revenues in Q1 2025, exposing the company to foreign currency risk [174]. Education Technology and Programs - The USHE segment provides flexible and affordable programs primarily through Capella University and Strayer University, catering to working adults [127]. - Torrens University offers a range of undergraduate and graduate programs in Australia, focusing on high-demand fields such as business and health [126]. - The Education Technology Services segment is crucial for driving enrollment through employer relationships, which significantly contribute to revenue [128]. - Education Technology Services segment revenue surged by 45.2% to $34.3 million in Q1 2025, driven by new employer partnerships and growth in Sophia Learning subscriptions [146]. Tax and Bad Debt - The effective tax rate for Q1 2025 was 29.2%, down from 31.2% in Q1 2024, with income tax expense decreasing to $12.3 million from $13.4 million [154]. - Bad debt expense was 4.2% of revenue in both Q1 2025 and Q1 2024, with a potential $1.4 million impact on income from operations for a 1% change in the allowance for credit losses [142]. - Bad debt expense as a percentage of revenue remained consistent at 4.2% for both Q1 2025 and Q1 2024 [170].

Financial Data and Key Metrics Changes - Strategic Education, Inc. reported a revenue growth of 5% in Q1 2025, with adjusted operating income increasing by 16% [5] - The operating margin improved to 13.6%, and adjusted earnings per share rose by 16% to $1.29, compared to $1.11 in Q1 2024 [5] Business Line Data and Key Metrics Changes - U.S. higher education revenue grew by 1%, with operating income increasing by 7% year-over-year [7] - The education technology services (ETS) segment saw a significant revenue growth of 45% and operating income increased by 37%, driven by higher employer-affiliated enrollment and new partnerships [11] - In Australia and New Zealand (ANZ), total enrollment decreased by 1%, but revenue increased by 6% on a constant currency basis, primarily due to pricing [8] Market Data and Key Metrics Changes - Total enrollment in U.S. higher education slightly increased, with employer-affiliated enrollment rising by 7% [6] - In ANZ, international enrollment declined due to regulatory changes, while domestic enrollment grew as part of the strategy to focus on the domestic market [8][31] Company Strategy and Development Direction - The company is focusing on strengthening corporate partnerships and deepening relationships in Workforce Edge to drive future growth [20] - There is a strategic shift towards increasing domestic enrollment in Australia, with enhanced marketing efforts [31] Management's Comments on Operating Environment and Future Outlook - Management noted that the flat enrollment growth in the U.S. is part of normal cyclicality and expects normalization to mid-single digit growth [18] - The company remains confident in achieving its long-term performance goals, including adjusted operating margin expansion in 2025 [40] Other Important Information - The company repurchased approximately 390,000 shares for a total of $32 million during the quarter, with $197 million remaining in share repurchase authorization [13] Q&A Session Summary Question: Concerns about U.S. higher education enrollment growth - Management indicated that the flat growth is part of normal cyclicality and expects mid-single digit growth to return [18][20] Question: Drivers behind strong EPS performance - The strength in Sofia Learning and Workforce Edge partnerships contributed to the solid EPS performance [22][23] Question: International enrollment decline in ANZ - Management explained that new regulations have made it harder for transfer students to enroll, impacting international enrollment [34] Question: Adjusted operating expenses and spending levels - Management confirmed that spending plans remain on track, with some timing differences in headcount affecting Q1 results [37] Question: Domestic versus international enrollment mix in ANZ - Management noted a shift towards more domestic enrollment, with historical trends showing a 50/50 split [45][46] Question: Update on large employer partner launch - The launch has been well-received, with demand running ahead of internal models [49][51]

Company Overview - Strategic Education Inc (SEI) is a global leader in digital education with a broad portfolio[4,10] - The company is headquartered in Herndon, VA, with a significant presence in Minneapolis, MN, Australia, and New Zealand[12] - Total enrollment is 108,685 students, with 88,860 in the USHE segment and 19,825 in the ANZ segment[12] - Annual revenue is $1.2 billion, broken down as USHE: $858 million, ANZ: $258 million, and ETS: $105 million[13] - The company has a strong balance sheet with $199 million in cash, cash equivalents, and marketable securities as of December 31, 2024, and distributable free cash flow of $129 million for the year[14] Q1 2025 Financial Highlights (Constant Currency) - Adjusted revenue increased by 5.3% to $305.7 million[17] - US Higher Education revenue increased by 0.8% to $221.0 million[17] - Education Technology Services revenue increased by 45.2% to $34.3 million[17] - Australia/New Zealand revenue increased by 6.4% to $50.4 million[17] - Adjusted operating income increased by 16.0% to $41.6 million[17] - US Higher Education operating income increased by 6.9% to $30.0 million[17] - Education Technology Services operating income increased by 37.3% to $13.8 million[17] - Adjusted net income increased by 16.6% to $31.1 million[17] - Adjusted diluted earnings per share increased by 16.2% to $1.29[17] Q1 2025 Financial Highlights (Current Currency) - Adjusted revenue increased by 4.6% to $303.6 million[18] - US Higher Education revenue increased by 0.8% to $221.0 million[18] - Education Technology Services revenue increased by 45.2% to $34.3 million[18] - Australia/New Zealand revenue increased by 1.9% to $48.3 million[18] - Adjusted operating income increased by 16.4% to $41.7 million[18] - US Higher Education operating income increased by 6.9% to $30.0 million[18] - Education Technology Services operating income increased by 37.3% to $13.8 million[18] - Adjusted net income increased by 16.9% to $31.2 million[18] - Adjusted diluted earnings per share increased by 17.1% to $1.30[18]

Financial Data and Key Metrics Changes - SEI's revenue grew by 5% in Q1 2025, with adjusted operating income increasing by 16% [4] - Operating margin increased to 13.6%, and adjusted earnings per share grew 16% to $1.29 compared to $1.11 in Q1 2024 [5] Business Line Data and Key Metrics Changes - Total enrollment in U.S. Higher Education slightly increased, driven by a 7% rise in employer-affiliated enrollment, offset by lower unaffiliated enrollment [5] - U.S. Higher Education revenue grew by 1%, and operating income increased by 7% from the previous year [6] - ANZ total enrollment decreased by 1%, primarily due to lower international enrollment related to regulatory changes [6] - ANZ revenue increased by 6% on a constant currency basis, driven by pricing, despite reporting an operating loss of $2.2 million [7][8] - Education Technology Services (ETS) segment revenue grew by 45%, with operating income increasing by 37% [9] Market Data and Key Metrics Changes - The percentage of total U.S. higher education enrollment from corporate partnerships reached 31%, an increase of 200 basis points from the prior year [6] - Enrollments in Workforce Edge increased nearly 50%, reaching approximately 2,300 students [10] Company Strategy and Development Direction - The company is focusing on expanding corporate partnerships and deepening relationships in Workforce Edge to drive future growth [15] - There is a strategic shift towards increasing domestic enrollment in Australia and New Zealand [25] Management Comments on Operating Environment and Future Outlook - Management noted that the enrollment slowdown is part of normal cyclicality, with expectations for mid-single-digit growth in the future [14] - Confidence was expressed regarding the performance in 2025 aligning with the notional model outlined at Investor Day [31] Other Important Information - The company repurchased approximately 390,000 shares for a total of $32 million during the quarter, with $197 million remaining in share repurchase authorization [10] Q&A Session Summary Question: U.S. Higher Education enrollment growth has slowed; any specific changes? - Management indicated no changes in marketing or advertising, attributing the slowdown to normal cyclicality [14] Question: What is driving the strong EPS numbers? - The strength in Sofia and increased marketing investments were highlighted as key drivers [17] Question: Comments on persistence rates? - Persistence rates were stable, with slight improvements noted [23] Question: Discussion on international enrollment and domestic growth in ANZ? - Management explained that regulatory changes impacted international enrollment, while domestic marketing efforts have been increased [25][27] Question: Adjusted operating expenses were up; any comments? - Management confirmed that spending plans remain on track, with some timing differences in headcount affecting the first quarter [29] Question: Confidence in revenue growth aligning with the notional model? - Management expressed confidence that revenue growth would align with the 4% to 6% target [39]

Strategic Education (STRA) came out with quarterly earnings of $1.30 per share, beating the Zacks Consensus Estimate of $1.01 per share. This compares to earnings of $1.11 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 28.71%. A quarter ago, it was expected that this for-profit education company would post earnings of $1.19 per share when it actually produced earnings of $1.27, delivering a surprise of 6.72%.Over the last fou ...

Exhibit 99.1 STRATEGIC EDUCATION, INC. REPORTS FIRST QUARTER 2025 RESULTS Three Months Ended March 31 U.S. Higher Education Segment Highlights Education Technology Services Segment Highlights • The Education Technology Services segment (ETS) is comprised primarily of Enterprise Partnerships, Sophia Learning, and Workforce Edge. 1 • Revenue increased 4.6% to $303.6 million compared to $290.3 million for the same period in 2024. Revenue on a constant currency basis, which is a non-GAAP financial measure, incr ...

If you are looking for a stock that has a solid history of beating earnings estimates and is in a good position to maintain the trend in its next quarterly report, you should consider Strategic Education (STRA) . This company, which is in the Zacks Schools industry, shows potential for another earnings beat.This for-profit education company has seen a nice streak of beating earnings estimates, especially when looking at the previous two reports. The average surprise for the last two quarters was 24.97%.For ...

Strategic Education (STRA) has been beaten down lately with too much selling pressure. While the stock has lost 18% over the past four weeks, there is light at the end of the tunnel as it is now in oversold territory and Wall Street analysts expect the company to report better earnings than they predicted earlier.Guide to Identifying Oversold StocksWe use Relative Strength Index (RSI), one of the most commonly used technical indicators, for spotting whether a stock is oversold. This is a momentum oscillator ...