Is Stride's $1.52 EPS a Glimpse of a Post-Tech-Recovery Upside?

Core Insights - Stride, Inc. (LRN) faced challenges in fiscal 2026 due to technical issues with its new technology platforms but still achieved double-digit revenue growth and strong profitability in Q1 [2][8] Financial Performance - Stride delivered an adjusted EPS of $1.52 in Q1 FY26 despite disruptions, indicating resilience in earnings [8] - The company's earnings estimates for fiscal 2026 and fiscal 2027 have been revised upward, reflecting a year-over-year improvement of 3.1% and 8.6%, respectively [6][7] Growth Drivers - The Career Learning segment was a key growth driver, with enrollment increasing by 20% year over year, benefiting from higher revenue per student and favorable margins [3][8] - Management views Career Learning as a long-term growth engine and a stabilizer during operational transitions [3] Future Outlook - Stride anticipates ongoing technology remediation efforts throughout fiscal 2026, with significant improvements expected in the coming months [4] - Although management has adjusted near-term enrollment growth expectations downward, they remain confident in returning to historical growth levels once systems stabilize [4] Market Position - Stride's stock is currently trading at a forward P/E ratio of 7.52, which is lower than competitors like Strategic Education (12.39) and American Public Education (17.21) [13][14] - In the past month, Stride's shares gained 3.9%, underperforming the Zacks Schools industry but outperforming the broader Zacks Consumer Discretionary sector and the S&P 500 Index [10]