Why Stride Stock Is Plummeting Today

Core Insights - Stride's shares have dropped nearly 49% following the release of first-quarter earnings, despite reporting increases in enrollments, revenue, and adjusted earnings per share by 11%, 13%, and 39% respectively [1][5] - The company has projected only 5% sales growth for 2026 due to significant issues encountered during the implementation of an upgraded platform [1][3] Enrollment and Revenue Impact - Stride experienced a loss of 10,000 to 15,000 enrollments due to disruptions from the platform upgrade, which is significant given the current total enrollment of 247,700 [2][5] - The implementation issues have negatively affected customer experience, leading to higher withdrawal rates and lower conversion rates than anticipated [3] Company Strategy and Future Outlook - Stride aimed for annualized sales growth of 19% over the past five years and sought to upgrade its platform to accommodate growth, but the execution did not meet expectations [3] - The CEO acknowledged the challenges faced during the implementation and emphasized ongoing efforts to rectify the situation with vendors [3] Market Reaction - The market has reacted cautiously to Stride's stock due to concerns over customer dissatisfaction and the potential for slower growth following the implementation issues [2][5] - Stride is currently trading at 13 times earnings, suggesting it may be viewed as a potential turnaround stock if management can restore customer trust [6]