Why Stride (LRN) Stock Can Reach Higher Highs

Core Insights - Stride (LRN) has been added to the Zacks Rank 1 (Strong Buy) list, with its stock price nearing a 52-week high of over $140, reflecting a performance increase of over 30% in 2025, supported by positive earnings estimate revisions [1][2]. Enrollment and Revenue Growth - Stride has experienced strong enrollment growth, particularly in its career learning programs for middle and high school students, as well as professional skills training for adults, contributing to a revenue increase of 14% expected in fiscal 2025 and a further 7% in FY26, reaching projected sales of$ 2.49 billion [3][4]. - The projected sales for FY26 would indicate a 139% growth since the pandemic, with 2020 sales recorded at $1.04 billion [3]. Earnings Estimates and Revisions - Earnings per share (EPS) estimates for FY25 and FY26 have increased by over 4% in the last 60 days, with FY25 EPS expected to rise by 48% to$ 6.96 compared to $4.69 in 2024, and FY26 EPS projected to increase by 9% to$ 7.62 [5][7]. Financial Health - Stride's cash reserves have significantly increased to $692 million from$ 212 million in 2020, with total assets amounting to $1.92 billion against total liabilities of$ 744 million, indicating a strong balance sheet [7][8]. Valuation Metrics - Despite a strong performance, Stride's stock trades at a forward earnings multiple of 20.6X, which is slightly above the Zacks Schools Industry average of 15.3X but comparable to the S&P 500 [9]. - Stride's cash flow per share (CFPS) ratio stands at 8X, significantly higher than the industry average of 0.4X and the benchmark's 6.1X [10]. Investment Appeal - Stride is considered one of the most attractive stocks in the consumer discretionary sector, with an overall "A" VGM Zacks Style Scores grade for Value, Growth, and Momentum, suggesting it may be an opportune time for investment [12].