LRN Stock Soars 24% in 3 Months: Should You Consider Buying it Now?

Core Viewpoint - Stride, Inc. (LRN) has demonstrated strong stock performance, significantly outperforming its industry and sector peers, driven by enrollment strength and strategic initiatives aimed at achieving long-term financial targets by 2028 [1][2][17]. Group 1: Stock Performance - LRN stock has increased by 24.1% over the past three months, while the Zacks Schools industry declined by 2.7% [1] - The stock closed at $85.12, nearing its 52-week high of$86.06 [1] - LRN has outperformed other industry players such as Adtalem Global Education Inc. (ATGE) and PowerSchool Holdings, Inc. (PWSC) during the same period [4] Group 2: Growth Drivers - Continued enrollment strength and improved student retention are key factors positioning Stride to meet its 2028 financial targets [2][9] - The acquisition of MedCerts in 2020 has been pivotal in enhancing adult learning offerings, contributing to consistent growth in the Career Learning segment [6] - MedCerts recently launched a Certified Nursing Assistant (CNA) eLearning program, addressing healthcare staffing shortages and contributing to revenue growth [7] Group 3: Financial Targets and Projections - Stride aims for a total revenue compound annual growth rate (CAGR) of 10%, adjusted operating income CAGR of 20%, and earnings per share (EPS) CAGR of 20% by fiscal 2028 [8] - The Career Learning segment saw a year-over-year revenue increase of 6.4% to $750.9 million and enrollment growth of 10.3% to 72,700 students in fiscal 2024 [7] Group 4: Capital Allocation and Valuation - The company employs a disciplined capital allocation strategy focusing on organic growth, new product development, and mergers and acquisitions [10] - LRN is currently trading at a discount compared to industry peers based on a forward 12-month price-to-earnings (P/E) ratio, indicating potential for attractive entry points for investors [13] Group 5: Earnings Estimates - The Zacks Consensus Estimate for LRN's fiscal 2025 earnings has increased, indicating a growth of 7.7% year-over-year, with fiscal 2026 earnings expected to grow by 11.8% [15]