Stride vs. Grand Canyon: Which Online Colleges Stock is a Better Buy?

Core Insights - The demand for digital educational alternatives is increasing as parents and students seek seamless ways to earn degrees, with a notable shift towards technology-driven and AI-focused options [1][4] - Key education providers like Stride, Inc. (LRN) and Grand Canyon Education, Inc. (LOPE) are transforming education through technology [1] Stride, Inc. (LRN) - Stride offers full-time online K-12 programs and is expanding its focus on career learning and adult certification programs [2] - The company has a market cap of approximately $6.03 billion and is experiencing record enrollment growth, particularly in its Career Learning segment, which saw a 32% year-over-year growth [4][5] - Stride raised its fiscal 2025 revenue guidance to $2.37-$2.385 billion, indicating a year-over-year growth of 16.2-16.9% [6] - The company is focused on enhancing its career education offerings, which aligns with the ongoing regulatory reforms in the U.S. education industry [5][6] Grand Canyon Education, Inc. (LOPE) - Grand Canyon Education has a market cap of about $5.2 billion and is benefiting from diversified university partnerships and tech-based offerings [8] - The company reported a 5.8% year-over-year enrollment growth at Grand Canyon University and a 12.1% increase in enrollments from university partners [10] - LOPE has launched 48 new programs since 2023, focusing on high-demand fields to align with workforce requirements [11] - For fiscal 2025, LOPE expects service revenues between $1,079.8 million and $1,099.8 million, reflecting a year-over-year growth of 4.5-6.5% [12] Stock Performance & Valuation - Year-to-date, Stride's share price performance has outperformed Grand Canyon Education [13] - Stride trades below LOPE on a forward price-to-sales (P/S) basis, suggesting a more attractive valuation for investors [14] - The Zacks Consensus Estimate indicates LRN's fiscal 2025 EPS will grow by 51.2% year-over-year, while LOPE's EPS is expected to grow by 8.8% [18][20] Return on Equity (ROE) - Grand Canyon Education's trailing 12-month ROE is 30.9%, significantly higher than Stride's average of 23.4%, indicating better efficiency in generating shareholder returns [20] Conclusion - Both Stride and Grand Canyon Education present strong opportunities in the online education market, but Stride is highlighted as the stronger investment case due to superior near-term earnings growth estimates and more attractive valuation [21][22]