Stride's Earnings Estimates Trending Up: Is It Time to Buy the Stock?

Core Insights - Stride, Inc.'s earnings estimates for fiscal years 2025 and 2026 have increased by 6.3% to $7.09 per share and 6.2% to $7.76 per share, respectively, indicating year-over-year growth of 51.2% and 9.4% [1][7] - Analysts are optimistic about Stride's revenue visibility and profitability due to a shift in demand towards tech-based and career-focused educational programs [2][19] - Stride's stock has risen 39.4% year-to-date, outperforming the Zacks Schools industry, Zacks Consumer Discretionary sector, and the S&P 500 index [3][4] Financial Performance - Stride's revenue guidance for fiscal 2025 has been raised to between $2.37 billion and $2.385 billion, reflecting a year-over-year growth of up to 16.9% [7][12] - Enrollment growth across key segments has increased by 20% year-over-year, with General Education and Career Learning segments growing by 12.8% and 32%, respectively [10][19] - The company expects fiscal 2028 revenues to range from $2.70 billion to $3.30 billion, indicating a 10% compound annual growth rate (CAGR) from fiscal 2023 [12] Market Positioning - Stride offers a diverse range of educational programs, including K-12 and career learning, which aligns with the increasing demand for skill-based education [9][10] - The online education sector is expanding, benefiting Stride's offerings in full-time online K-12 programs and career education [11][19] - Stride's stock is trading at a premium with a forward 12-month price-to-earnings (P/E) ratio of 18.73X, reflecting strong market potential [16] Liquidity and Capital Management - Stride maintains a stable cash position with cash and cash equivalents at $528.5 million, up from $500.6 million at the end of fiscal 2024 [13] - The company follows a balanced capital allocation strategy, focusing on organic growth, product development, and strategic acquisitions [14] Analyst Sentiment - The upward revision of earnings estimates reflects a positive outlook for Stride, with four out of five analysts recommending a "Strong Buy" [20][23]