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In the last reported quarter, the company reported lackluster earnings and revenues. Its adjusted losses lagged the Zacks Consensus Estimate by a whopping 200% and expanded 260% from the year-ago quarter. The company’s revenues of $425.2 million slightly exceeded the consensus mark of $424 million and increased just 6.2% from the prior-year level.
Its earnings surpassed the consensus mark in 11 of the trailing 12 quarters.
Trend in Estimate Revision
The Zacks Consensus Estimate for earnings for the quarter to be reported remained has stable at $1.07 per share over the past 60 days. This implies year-over-year growth of 7%. The consensus mark for revenues is $445.08 million, suggesting a year-over-year rise of 8.7%.
Although the companies in the Zacks Schools industry have been facing COVID-related challenges like higher advertising and marketing expenses and costs pertaining to online education, Stride is likely to have generated higher earnings and revenues in the fiscal second quarter.
The company is banking on Career Learning enrollment strength, increases in revenue per enrollment and Adult Learning growth. Also, a focus on improving the user experience, enhancing teacher tools and strengthening student engagement bodes well. These positives are likely to have boosted enrollments in the to-be-reported quarter.
In addition to higher enrollments, the company’s adult learning business is likely to have witnessed stronger student retention, backed by the online and hybrid education trend, non-traditional educational technologies as well as low-cost certificate programs.
However, higher advertising and marketing spend, inflation and the reduced number of jobs available to graduates that resulted in lower salary offerings might have impacted its profit level.
That said, the ongoing focus on cost reduction and operating efficiency is expected to have aided margins to some extent. For the quarter to be reported, Stride expects revenues in the range of $435-$465 million and adjusted operating income within $70-$80 million. Also, it projects capital expenditures of $17-$20 million. In second-quarter fiscal 2022, it reported revenues of $409.5 million and adjusted operating income of $60.7 million.
What Our Quantitative Model Predicts
Our proven model does not conclusively predict an earnings beat for Stride this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.
Earnings ESP: LRN has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Here are some companies in the Zacks Consumer Discretionary sector that according to our model, have the right combination of elements to post an earnings beat in their respective quarters to be reported.
Boyd Gaming Corporation (BYD - Free Report) has an Earnings ESP of +1.44% and a Zacks Rank #3.
Boyd Gaming’s earnings topped the consensus mark in all the last four quarters, with the average being 11.2%. Earnings for the to-be-reported quarter are expected to grow 9.6% year over year.
Caesars Entertainment, Inc. (CZR - Free Report) has an Earnings ESP of +5.69% and a Zacks Rank #3.
Caesars Entertainment’s earnings topped the consensus mark in two of the last four quarters and missed in the other two, with the average being negative 3.7%. Earnings for the to-be-reported quarter are expected to increase 113.2% year over year.
Hyatt Hotels Corporation (H - Free Report) has an Earnings ESP of +11.73% and a Zacks Rank #3.
Hyatt’s earnings topped the consensus mark in three of the last four quarters and missed on one occasion, with the average positive surprise being 652.3%. Earnings for the to-be-reported quarter are expected to grow 111.5% year over year.
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Stride (LRN) to Report Q2 Earnings: What's in the Offing?
Stride, Inc. (LRN - Free Report) is slated to release second-quarter fiscal 2023 results on Jan 24, after market close.
In the last reported quarter, the company reported lackluster earnings and revenues. Its adjusted losses lagged the Zacks Consensus Estimate by a whopping 200% and expanded 260% from the year-ago quarter. The company’s revenues of $425.2 million slightly exceeded the consensus mark of $424 million and increased just 6.2% from the prior-year level.
Its earnings surpassed the consensus mark in 11 of the trailing 12 quarters.
Trend in Estimate Revision
The Zacks Consensus Estimate for earnings for the quarter to be reported remained has stable at $1.07 per share over the past 60 days. This implies year-over-year growth of 7%. The consensus mark for revenues is $445.08 million, suggesting a year-over-year rise of 8.7%.
Stride, Inc. Price and EPS Surprise
Stride, Inc. price-eps-surprise | Stride, Inc. Quote
Factors to Note
Although the companies in the Zacks Schools industry have been facing COVID-related challenges like higher advertising and marketing expenses and costs pertaining to online education, Stride is likely to have generated higher earnings and revenues in the fiscal second quarter.
The company is banking on Career Learning enrollment strength, increases in revenue per enrollment and Adult Learning growth. Also, a focus on improving the user experience, enhancing teacher tools and strengthening student engagement bodes well. These positives are likely to have boosted enrollments in the to-be-reported quarter.
In addition to higher enrollments, the company’s adult learning business is likely to have witnessed stronger student retention, backed by the online and hybrid education trend, non-traditional educational technologies as well as low-cost certificate programs.
However, higher advertising and marketing spend, inflation and the reduced number of jobs available to graduates that resulted in lower salary offerings might have impacted its profit level.
That said, the ongoing focus on cost reduction and operating efficiency is expected to have aided margins to some extent. For the quarter to be reported, Stride expects revenues in the range of $435-$465 million and adjusted operating income within $70-$80 million. Also, it projects capital expenditures of $17-$20 million. In second-quarter fiscal 2022, it reported revenues of $409.5 million and adjusted operating income of $60.7 million.
What Our Quantitative Model Predicts
Our proven model does not conclusively predict an earnings beat for Stride this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.
Earnings ESP: LRN has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Stride currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Stocks With Favorable Combination
Here are some companies in the Zacks Consumer Discretionary sector that according to our model, have the right combination of elements to post an earnings beat in their respective quarters to be reported.
Boyd Gaming Corporation (BYD - Free Report) has an Earnings ESP of +1.44% and a Zacks Rank #3.
Boyd Gaming’s earnings topped the consensus mark in all the last four quarters, with the average being 11.2%. Earnings for the to-be-reported quarter are expected to grow 9.6% year over year.
Caesars Entertainment, Inc. (CZR - Free Report) has an Earnings ESP of +5.69% and a Zacks Rank #3.
Caesars Entertainment’s earnings topped the consensus mark in two of the last four quarters and missed in the other two, with the average being negative 3.7%. Earnings for the to-be-reported quarter are expected to increase 113.2% year over year.
Hyatt Hotels Corporation (H - Free Report) has an Earnings ESP of +11.73% and a Zacks Rank #3.
Hyatt’s earnings topped the consensus mark in three of the last four quarters and missed on one occasion, with the average positive surprise being 652.3%. Earnings for the to-be-reported quarter are expected to grow 111.5% year over year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.