Stride(US:LRN) ZACKS·2025-10-27 15:21Core Insights - Stride, Inc. (LRN) is set to report its first-quarter fiscal 2026 results on October 28, with expectations of strong performance based on previous quarters [1][6] - The company has shown a consistent ability to exceed earnings estimates, with adjusted EPS and total revenues growing significantly year-over-year [1][2] Financial Performance - In the last reported quarter, Stride's adjusted EPS was $2.29, surpassing the Zacks Consensus Estimate by 25.1%, while total revenues reached $614.6 million, exceeding estimates by 3.9% [1][2] - The consensus estimate for the upcoming quarter's adjusted EPS is $1.23, reflecting a 30.9% increase from the previous year, and total revenues are expected to rise by 11.5% year-over-year [4][6] Enrollment and Growth Factors - Enrollment growth is anticipated to be between 10% and 15% year-over-year, driven by strong demand for tech-based education and career-focused programs [9][17] - The integration of AI in educational offerings and a focus on K12 Tutoring are expected to enhance growth prospects [8][17] Cost and Margin Considerations - While increased instructional costs and SG&A expenses may pressure margins, the overall top-line growth is expected to provide leverage [10][18] - The company aims to balance business investments and control expenses to maintain margin scalability [10] Market Position and Valuation - Stride's stock has appreciated by 18.5% over the past three months, outperforming its industry and broader market indices [14] - The stock is trading at a premium compared to industry averages but below its median forward P/E ratio, suggesting a cautious investment approach [15][18] Long-term Outlook - The ongoing regulatory reforms in the U.S. education sector and the demand for online K-12 and career education programs position Stride favorably for long-term growth [11][18] - The company's strategic focus on AI integration and enrollment growth reinforces its competitive edge in the education market [17][18]