Core Insights - The Zacks Schools industry is experiencing a recovery driven by increased demand for applied and career-oriented education, particularly in healthcare, skilled trades, cybersecurity, and IT [1][5] - Technology is becoming a significant competitive advantage, with institutions investing in adaptive learning systems and online platforms to enhance student engagement and operational efficiency [2][8] - The industry is consolidating, with larger providers acquiring smaller institutions to expand offerings and improve operational leverage [6] Industry Overview - The Zacks Schools industry includes for-profit education companies offering various programs in finance, healthcare, technology, and skilled trades, focusing on career-oriented education [4] - The sector is addressing the shortage of healthcare professionals through intensive training models linked to industry needs [1][5] Trends Influencing Growth - There is a rising demand for workforce-oriented programs, particularly among adult learners and career switchers, as the labor market increasingly values job-ready skills [5] - Government initiatives supporting vocational education and non-degree pathways are contributing to the growth outlook [3][5] Financial Performance and Valuation - The Zacks Schools industry has a Zacks Industry Rank of 65, placing it in the top 27% of over 250 Zacks industries, indicating positive near-term prospects [11][12] - The industry's forward 12-month price-to-earnings ratio is currently at 12.58X, significantly lower than the S&P 500's 23.57X, suggesting potential undervaluation [18] Key Companies and Their Prospects - **McGraw Hill**: Experiencing growth from digital and subscription models, with a projected fiscal 2026 earnings of $1.63 per share on $2.05 billion in revenues, reflecting a 300% surprise in the last quarter [21][24] - **Grand Canyon Education**: Focused on scalable online expansion and healthcare programs, with expected earnings growth of 12.9% and 11.2% for 2025 and 2026, respectively [27][28] - **Perdoceo Education**: Benefiting from rising student interest and expanding program offerings, with expected earnings growth of 11.4% and 9% for 2025 and 2026 [31][32] - **Adtalem**: Gaining from enrollment momentum and strategic partnerships, with projected earnings growth of 17.7% and 13.7% for fiscal 2026 and 2027 [35][37] - **Nerdy**: Enhancing its platform with AI integration, with improvements in earnings estimates for 2025 and 2026, indicating a potential investment opportunity [39][40]

Core Insights - Stride, Inc.'s Career Learning segment has shown significant growth, with enrollments increasing by 20% year over year to 110,000 and revenues rising by 16.3% to $257.8 million in Q1 of fiscal 2026, reflecting a shift in U.S. education towards career-aligned pathways [1] - Adjusted EBITDA for the same period grew by 29.2% year over year, although the company faced challenges due to a large-scale technology platform overhaul, which increased operating expenses and withdrawal rates [2][3] - The long-term outlook remains positive, with expectations for platform stabilization and continued demand in Career Learning, potentially leading to margin expansion in fiscal 2027 [4] Company Performance - Stride's competitive position in the career learning and K-12 services market is strong, particularly due to its integrated model that combines K-12 education with career learning, which is not fully replicated by competitors [5][7] - The company faces competition from American Public Education, which targets specific adult markets, and Coursera, which offers flexibility and global recognition [6][7] - Stride's stock has underperformed, dropping 61.4% over the past three months, and currently trades at a forward P/E ratio of 7.42, indicating a discount compared to industry peers [8][11] Earnings Outlook - Earnings estimates for fiscal 2026 and 2027 have been revised downwards by 4.8% and 8.3%, respectively, due to ongoing operational challenges and a muted enrollment growth outlook [12] - Despite the downward revisions, the estimates still imply year-over-year improvements of 3.6% for fiscal 2026 and 6.2% for fiscal 2027 [13]

Company Overview - Legacy Education Inc. (LGCY) is part of the Consumer Discretionary sector, which includes 265 companies and is currently ranked 12 in the Zacks Sector Rank [2] - The company has a Zacks Rank of 2 (Buy), indicating a favorable outlook based on earnings estimates and revisions [3] Performance Analysis - Over the past three months, the Zacks Consensus Estimate for LGCY's full-year earnings has increased by 5.6%, reflecting improved analyst sentiment [4] - Year-to-date, LGCY has returned approximately 19.7%, significantly outperforming the Consumer Discretionary sector's average return of 0.7% [4] Industry Context - Legacy Education Inc. operates within the Schools industry, which consists of 19 stocks and is currently ranked 66 in the Zacks Industry Rank [6] - The Schools industry has experienced an average decline of 6.7% year-to-date, indicating that LGCY is performing better than its industry peers [6] Comparative Analysis - Another notable stock in the Consumer Discretionary sector is H World Group (HTHT), which has returned 39.9% year-to-date and also holds a Zacks Rank of 2 (Buy) [5] - H World Group is part of the Hotels and Motels industry, which is ranked 188 and has seen a decline of 4.3% year-to-date [6] Investment Outlook - Investors interested in Consumer Discretionary stocks should continue to monitor Legacy Education Inc. and H World Group for their strong performance [7]

Core Insights - Stride, Inc. (LRN) experienced an 11.3% enrollment growth in Q1 of fiscal 2026, with Career Learning enrollments increasing by 20% and General Education enrollments rising by 5.2% [1][8] - The company's diversified offerings in career learning, particularly in healthcare, IT, and advanced manufacturing, are enhancing its growth prospects as the market shifts towards virtual and career-oriented education [1][4] - However, technical disruptions in its platforms have led to a projected loss of 10,000-15,000 enrollments for fiscal 2026, resulting in a muted outlook despite positive growth trends [3][8] Enrollment and Growth - The 11.3% enrollment growth is primarily driven by a significant 20% increase in Career Learning enrollments [1][8] - General Education enrollments also saw a modest improvement of 5.2% [1] Technical Challenges - Stride has faced technical issues since August 2025, leading to withdrawals from its platforms and a poor customer experience, which negatively impacted conversion rates [2][3] - The company is actively working to resolve these technical challenges, with expectations for major improvements in the coming months [3][4] Market Performance - Stride's stock has declined by 60.8% over the past three months, underperforming compared to the Zacks Schools industry and the broader market [5][8] - Competitors like Strategic Education, Inc. and American Public Education, Inc. are also in the market, with Strategic Education's shares down 3% and American Public Education's shares up 13.8% in the same period [6] Valuation and Earnings Estimates - LRN's stock is currently trading at a forward 12-month P/E ratio of 7.66, which is lower than its competitors, Strategic Education at 12.14 and American Public Education at 17.05 [9][10] - Earnings estimates for fiscal 2026 and 2027 have been revised downwards by 4.8% and 8.3%, respectively, due to ongoing concerns and a muted enrollment outlook [11][12]

Core Insights - Universal Technical Institute (UTI) reported quarterly earnings of $0.34 per share, exceeding the Zacks Consensus Estimate of $0.26 per share, and matching the earnings from the previous year [1] - The company achieved a revenue of $222.44 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 1.28% and showing an increase from $196.36 million year-over-year [3] Earnings Performance - The earnings surprise for the quarter was +30.77%, with a previous quarter surprise of +58.33% [2] - UTI has consistently surpassed consensus EPS estimates over the last four quarters [2] Stock Performance - UTI shares have increased by approximately 12.6% since the beginning of the year, slightly outperforming the S&P 500's gain of 12.5% [4] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.24 on revenues of $218.61 million, and for the current fiscal year, it is $0.96 on revenues of $902.3 million [8] - The Zacks Rank for UTI is currently 4 (Sell), indicating expectations of underperformance in the near future [7] Industry Context - The Schools industry, to which UTI belongs, is currently ranked in the top 29% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [9]

Core Viewpoint - Adtalem Global Education (ATGE) has been outperforming the Consumer Discretionary sector in 2023, with a year-to-date return of approximately 5.4%, while the sector has seen an average loss of 14.7% [4]. Company Performance - Adtalem Global Education is ranked 12 in the Zacks Sector Rank among 265 companies in the Consumer Discretionary group [2]. - The Zacks Rank for ATGE is currently 2 (Buy), indicating a positive earnings outlook [3]. - The Zacks Consensus Estimate for ATGE's full-year earnings has increased by 1.2% over the past quarter, reflecting improved analyst sentiment [4]. Industry Comparison - Adtalem Global Education belongs to the Schools industry, which is ranked 70 in the Zacks Industry Rank. This industry has experienced an average loss of 2.7% this year, indicating that ATGE is performing better than its peers [6]. - In contrast, Ralph Lauren, another stock in the Consumer Discretionary sector, has a year-to-date return of 42.1% and belongs to the Textile - Apparel industry, which is ranked 88 and has declined by 18.8% this year [5][6]. Future Outlook - Investors interested in Consumer Discretionary stocks should monitor Adtalem Global Education and Ralph Lauren, as both companies are expected to maintain their strong performance [7].

Core Viewpoint - Stride, Inc. (LRN) experienced a significant stock decline of 57% following the release of its first-quarter fiscal 2026 earnings, despite reporting earnings and revenues that exceeded consensus estimates [2][3][7]. Financial Performance - In the first quarter of fiscal 2026, Stride's earnings and revenues surpassed the Zacks Consensus Estimate by 23.6% and 1%, respectively, with year-over-year growth of 39.4% in earnings and 12.7% in revenues, driven by increased enrollments and revenue per enrollment [3][7]. - The Career Learning segment showed stronger growth than the General Education segment during this quarter, with Career Learning revenues increasing by 16.3% year over year [19]. Challenges and Outlook - Stride's fiscal 2026 outlook is muted due to ongoing issues with technology platform rollouts, which have led to approximately 10,000-15,000 fewer enrollments than expected [5][6][7]. - The company has indicated that enrollment trends may remain subdued throughout the fiscal year, raising concerns among investors [3][6][7]. - Earnings estimates for fiscal 2026 and 2027 have been revised downward by 4.8% and 8.3%, respectively, reflecting the impact of these challenges on analyst expectations [9]. Competitive Position - Stride competes in the career learning and K-12 services sectors against companies like Strategic Education, American Public Education, and Coursera, each with distinct strengths [11][12][14]. - Stride's integrated K-12 and career learning model provides a competitive edge, particularly in the adult skills market, although it faces substantial competition from larger players [14]. Growth Factors - Stride's business model includes K-12 online programs and expanding hybrid options, aligning with the shift towards virtual and career-oriented education [15]. - The company is focusing on affordability in its offerings, including free tutoring programs for younger students and personalized career-focused education [17][18][19]. - As of September 30, 2025, Stride maintained a stable liquidity position with cash and cash equivalents of $518.4 million, sufficient to meet long-term obligations [20]. Valuation - Stride's stock is currently trading at a discount compared to industry peers, with a forward 12-month price-to-earnings (P/E) ratio of 7.57 [22]. - Despite the near-term challenges, the company retains strong structural demand tailwinds, particularly in its higher-margin Career Learning segment [23][25].

Core Insights - Legacy Education Inc. reported quarterly earnings of $0.16 per share, exceeding the Zacks Consensus Estimate of $0.15 per share, but down from $0.21 per share a year ago, indicating an earnings surprise of +6.67% [1] - The company achieved revenues of $19.4 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 5.79% and up from $14.01 million year-over-year [2] - Legacy Education Inc. has outperformed consensus EPS estimates three times over the last four quarters and has topped consensus revenue estimates four times in the same period [2] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.13 on revenues of $18.05 million, while the estimate for the current fiscal year is $0.64 on revenues of $75.1 million [7] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Context - The Schools industry, to which Legacy Education Inc. belongs, is currently in the top 30% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Core Insights - Stride, Inc. (LRN) is positioned at the intersection of technology, personalized instruction, and workforce readiness, offering online and blended education solutions that cater to the shift towards virtual and career-oriented education options [2][5] Company Overview - Stride, Inc. provides K-12 online school programs and expanding hybrid and in-person options through a career learning platform focused on sectors like healthcare, IT, and advanced manufacturing [3] - The company reported a 16.3% year-over-year revenue growth in its Career Learning segment, reaching $257.8 million in the first quarter of fiscal 2026, with enrollments increasing by 20% [3][10] - The General Education segment also saw a revenue growth of 10.2% year-over-year in the same quarter [3] Strategic Initiatives - Stride's focus on hybrid innovation is supported by state-level funding flexibility, allowing partnerships with school districts for scalable and cost-effective educational solutions [4] - The K12 Tutoring collaboration with Lake Forest School District exemplifies Stride's strategy to diversify its offerings and enhance revenue visibility [4] Competitive Landscape - Stride competes in the education market with other players like Strategic Education, Inc. (STRA) and American Public Education, Inc. (APEI), leveraging its hybrid strengths in K-12 and fast-growing Career Learning [6][8] - Strategic Education focuses on post-secondary credentials and employer partnerships, while American Public Education targets working adults and military markets with specialized programs [7] Stock Performance and Valuation - Stride's stock has decreased by 57.7% over the past three months, underperforming compared to the Zacks Schools industry and the broader market [9][10] - The stock is currently trading at a forward 12-month price-to-earnings (P/E) ratio of 7.65, indicating a discount relative to industry peers [11] - Earnings estimates for fiscal 2026 and 2027 have been revised downwards to $8.39 and $8.90 per share, respectively, but still imply year-over-year improvements of 3.6% and 6.2% [13]

Core Viewpoint - Afya reported quarterly earnings of $0.38 per share, exceeding the Zacks Consensus Estimate of $0.32 per share, marking an earnings surprise of +18.75% [1][2] Financial Performance - The company posted revenues of $170.44 million for the quarter ended September 2025, which was slightly below the Zacks Consensus Estimate by 0.16%, compared to $151.71 million in the same quarter last year [2] - Over the last four quarters, Afya has surpassed consensus EPS estimates three times and topped consensus revenue estimates two times [2] Stock Performance - Afya shares have declined approximately 9.1% since the beginning of the year, while the S&P 500 has gained 16.4% [3] - The current Zacks Rank for Afya is 3 (Hold), indicating that the shares are expected to perform in line with the market in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.40 on revenues of $172.53 million, and for the current fiscal year, it is $1.71 on revenues of $687.12 million [7] - The trend of estimate revisions for Afya was mixed ahead of the earnings release, which could change following the recent report [6] Industry Context - The Schools industry, to which Afya belongs, is currently ranked in the bottom 32% of over 250 Zacks industries, suggesting potential challenges for stock performance [8]