Can Stride Sustain Double-Digit EPS Growth as Investments Rise?

Core Insights - Stride, Inc. (LRN) reported strong operational and financial performance with adjusted EPS of $8.10 in fiscal 2025, a 48% increase from $5.49 in the previous year, indicating higher efficiency and disciplined execution [1][10] - The company is focusing on long-term expansion through reinvestment in academic improvement, engagement platforms, and modernized career programs [2][4] Financial Performance - The adjusted EPS for fiscal 2026 is estimated to be $8.81, reflecting an 8.8% year-over-year growth [12] - Stride anticipates continued gross margin improvement in fiscal 2026, albeit at a moderated pace compared to previous years, supported by effective cost management [4] Investment Strategy - Stride is investing in technology to modernize its learning ecosystem, including responsible AI adoption to enhance efficiency and teaching quality [3][7] - The company is allocating funds towards new tutoring programs and engagement platforms to improve student participation and retention [2][4] Competitive Landscape - Stride operates in a competitive online education market with peers like Coursera, Inc. and Strategic Education, Inc., which are expanding their presence through innovative programs and AI applications [5][6] - Stride differentiates itself by combining academic programs with tutoring and support services, which helps drive consistent enrollment in career-focused pathways [6][10] Stock Performance - Stride's stock has increased by 39.3% year to date, outperforming the Zacks Schools industry [8] - The stock is currently trading at a forward 12-month P/E ratio of 15.98, indicating a premium compared to industry peers [14]