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Stride vs. Chegg: Which Online Education Stock is a Smarter Buy?
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Key Takeaways
LRN stock has outpaced CHGG year to date, supported by strong enrollment growth and revenue momentum.
Free AI tools are challenging Chegg paid subscription model, pressuring growth and market share.
Stride trades at a premium P/S ratio than Chegg, indicating strong investor confidence and market potential.
The online education space continues to evolve as digital learning becomes an increasingly mainstream option for students of all ages. Among the key players in this arena are Stride, Inc. (LRN - Free Report) and Chegg, Inc. (CHGG - Free Report) , two companies that serve different segments of the broader edtech market but share a common goal of transforming education through technology. Both stocks have drawn investor interest as the sector adapts to post-pandemic trends, the rise of AI-driven tools and shifting demand dynamics.
Stride mainly focuses on offering full-time online K-12 programs to students looking for an online alternative, with currently expanding its focus toward career learning and adult certification programs. Chegg, in contrast, operates a direct-to-consumer subscription model, offering digital study aids, homework help and increasingly, AI-driven tutoring for college and post-secondary learners.
Let’s dive deep and closely compare the fundamentals of the two stocks to determine which one is a better investment now.
The Case for Stride Stock
This Virginia-based education company, with a market cap of about $6.33 billion, is witnessing record enrollment growth trends, especially for the Career Learning segment, driven by demand strength for online full-time K-12 programs and career education. This, coupled with ongoing regulatory reform trends and its strategic business initiatives, is catalyzing the growth prospects.
Stride is going strong through fiscal 2025 with building strong momentum for fiscal 2026 and beyond. During the first nine months of fiscal 2025, the company witnessed enrollment growth across its General Education and Career Learning segments, which was up year over year by 12.8% to 137,500 students and 32% to 96,000 students, respectively, bringing the overall enrollment growth to 20%. Owing to robust trends, the company raised its fiscal 2025 revenue guidance between $2.37 billion and $2.385 billion, reflecting 16.2-16.9% year-over-year growth. This complements its current focus on reaching fiscal 2028 targets, highlighting revenues growing in the range of $2.70-$3.30 billion, reflecting a 10% compound annual growth rate (CAGR) from fiscal 2023.
LRN’s strategic investments focusing on school-as-a-service offerings, a personalized learning model and improving user experience of its products position it well to witness such trends in the upcoming period, despite the ongoing macro risks.
On the funding front, the outlook for fiscal 2026 appears favorable. While state budget processes are ongoing, early indicators suggest a generally positive funding environment. Importantly, federal funding represents less than 5% of Stride’s revenues, minimizing exposure to federal budget uncertainties or policy shifts.
The Case for Chegg Stock
This California-based education technology company, with a market cap of approximately $173.7 million, is witnessing a setback in the number of subscribers who have paid to access its services, besides a decrease in Chegg Skills' contribution due to lower enrollments. Its current competition is from the free AI tools available in the market, offering similar services to students, for which they would have paid a subscription fee to Chegg.
Chegg started 2025 quite dimly, with net revenues declining 30% year over year to $121.4 million, primarily due to 30% decline in Subscription Services revenues and 32% tumble of Skills and Other revenues, as of March 31, 2025, Chegg’s total Subscription Services subscribers were 3.2 million, indicating a 31% year-over-year decline. However, to expand its service offerings and minimize the competition headwinds, the company is running several pilot projects. In the first quarter of 2025, the company rolled out EdifyOnline and Noodle to provide AI programs that support a higher education initiative in India. In the upcoming quarters, it expects to expand its Guild business and add additional partners to leverage the opportunities and foster revenue visibility.
Moreover, CHGG seems optimistic about its reinvented Chegg Skills product, offering skill-building services for the modern workforce, including foundational digital skilling and broad-based AI training. The results in the form of profitability and positive revenue growth, through this offering, are expected to be visible from 2026.
Stock Performance & Valuation
As witnessed from the chart below, year to date, Stride’s share price performance stands above Chegg’s.
Image Source: Zacks Investment Research
Considering valuation, over the last five years, Stride is trading above Chegg on a forward 12-month price-to-sales (P/S) ratio basis. The overvaluation of LRN compared with CHGG indicates its strong potential in the market, given the favorable trends backing it up.
Image Source: Zacks Investment Research
Comparing EPS Estimate Trends: LRN vs CHGG
The Zacks Consensus Estimate for LRN’s fiscal 2025 EPS indicates 51.2% growth, while the fiscal 2026 estimate indicates a year-over-year increase of 9.4%. The fiscal 2025 and 2026 EPS estimates have trended upward over the past 60 days.
LRN's EPS Trend
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for CHGG’s 2025 bottom line implies a year-over-year decline of 125.3% while the same reflects a 134.2% growth for 2026. Its 2025 EPS estimates have trended downward over the past 30 days, while 2026 estimates have moved up during the same time frame.
CHGG's EPS Trend
Image Source: Zacks Investment Research
Concluding Thoughts on Investment
Per the discussion above, Stride offers a relatively strong investment hold compared with Chegg, backed by favorable market trends with its in-house initiatives offering a competitive edge. Stride’s diversified offerings, especially through its online platform, are backing its revenue visibility and bottom-line growth.
Chegg, on the other hand, is struggling despite favorable demand trends for online education offerings. With a subscription fee-based business model and main source of revenues, the current surge in demand for free AI tools is marring its market presence. However, the company is currently piloting diversified programs, especially around AI tools, which are expected to boost its market share in the upcoming period and foster revenue visibility.
Upon comparison, based on the market fundamentals and growth trends alongside technical indicators, Stride, sporting a Zacks Rank #1 (Strong Buy) at present, seems to offer the better upside potential for investors seeking an option with sustainable growth compared with Chegg, which is carrying a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.
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Stride vs. Chegg: Which Online Education Stock is a Smarter Buy?
Key Takeaways
The online education space continues to evolve as digital learning becomes an increasingly mainstream option for students of all ages. Among the key players in this arena are Stride, Inc. (LRN - Free Report) and Chegg, Inc. (CHGG - Free Report) , two companies that serve different segments of the broader edtech market but share a common goal of transforming education through technology. Both stocks have drawn investor interest as the sector adapts to post-pandemic trends, the rise of AI-driven tools and shifting demand dynamics.
Stride mainly focuses on offering full-time online K-12 programs to students looking for an online alternative, with currently expanding its focus toward career learning and adult certification programs. Chegg, in contrast, operates a direct-to-consumer subscription model, offering digital study aids, homework help and increasingly, AI-driven tutoring for college and post-secondary learners.
Let’s dive deep and closely compare the fundamentals of the two stocks to determine which one is a better investment now.
The Case for Stride Stock
This Virginia-based education company, with a market cap of about $6.33 billion, is witnessing record enrollment growth trends, especially for the Career Learning segment, driven by demand strength for online full-time K-12 programs and career education. This, coupled with ongoing regulatory reform trends and its strategic business initiatives, is catalyzing the growth prospects.
Stride is going strong through fiscal 2025 with building strong momentum for fiscal 2026 and beyond. During the first nine months of fiscal 2025, the company witnessed enrollment growth across its General Education and Career Learning segments, which was up year over year by 12.8% to 137,500 students and 32% to 96,000 students, respectively, bringing the overall enrollment growth to 20%. Owing to robust trends, the company raised its fiscal 2025 revenue guidance between $2.37 billion and $2.385 billion, reflecting 16.2-16.9% year-over-year growth. This complements its current focus on reaching fiscal 2028 targets, highlighting revenues growing in the range of $2.70-$3.30 billion, reflecting a 10% compound annual growth rate (CAGR) from fiscal 2023.
LRN’s strategic investments focusing on school-as-a-service offerings, a personalized learning model and improving user experience of its products position it well to witness such trends in the upcoming period, despite the ongoing macro risks.
On the funding front, the outlook for fiscal 2026 appears favorable. While state budget processes are ongoing, early indicators suggest a generally positive funding environment. Importantly, federal funding represents less than 5% of Stride’s revenues, minimizing exposure to federal budget uncertainties or policy shifts.
The Case for Chegg Stock
This California-based education technology company, with a market cap of approximately $173.7 million, is witnessing a setback in the number of subscribers who have paid to access its services, besides a decrease in Chegg Skills' contribution due to lower enrollments. Its current competition is from the free AI tools available in the market, offering similar services to students, for which they would have paid a subscription fee to Chegg.
Chegg started 2025 quite dimly, with net revenues declining 30% year over year to $121.4 million, primarily due to 30% decline in Subscription Services revenues and 32% tumble of Skills and Other revenues, as of March 31, 2025, Chegg’s total Subscription Services subscribers were 3.2 million, indicating a 31% year-over-year decline. However, to expand its service offerings and minimize the competition headwinds, the company is running several pilot projects. In the first quarter of 2025, the company rolled out EdifyOnline and Noodle to provide AI programs that support a higher education initiative in India. In the upcoming quarters, it expects to expand its Guild business and add additional partners to leverage the opportunities and foster revenue visibility.
Moreover, CHGG seems optimistic about its reinvented Chegg Skills product, offering skill-building services for the modern workforce, including foundational digital skilling and broad-based AI training. The results in the form of profitability and positive revenue growth, through this offering, are expected to be visible from 2026.
Stock Performance & Valuation
As witnessed from the chart below, year to date, Stride’s share price performance stands above Chegg’s.
Image Source: Zacks Investment Research
Considering valuation, over the last five years, Stride is trading above Chegg on a forward 12-month price-to-sales (P/S) ratio basis. The overvaluation of LRN compared with CHGG indicates its strong potential in the market, given the favorable trends backing it up.
Image Source: Zacks Investment Research
Comparing EPS Estimate Trends: LRN vs CHGG
The Zacks Consensus Estimate for LRN’s fiscal 2025 EPS indicates 51.2% growth, while the fiscal 2026 estimate indicates a year-over-year increase of 9.4%. The fiscal 2025 and 2026 EPS estimates have trended upward over the past 60 days.
LRN's EPS Trend
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for CHGG’s 2025 bottom line implies a year-over-year decline of 125.3% while the same reflects a 134.2% growth for 2026. Its 2025 EPS estimates have trended downward over the past 30 days, while 2026 estimates have moved up during the same time frame.
CHGG's EPS Trend
Image Source: Zacks Investment Research
Concluding Thoughts on Investment
Per the discussion above, Stride offers a relatively strong investment hold compared with Chegg, backed by favorable market trends with its in-house initiatives offering a competitive edge. Stride’s diversified offerings, especially through its online platform, are backing its revenue visibility and bottom-line growth.
Chegg, on the other hand, is struggling despite favorable demand trends for online education offerings. With a subscription fee-based business model and main source of revenues, the current surge in demand for free AI tools is marring its market presence. However, the company is currently piloting diversified programs, especially around AI tools, which are expected to boost its market share in the upcoming period and foster revenue visibility.
Upon comparison, based on the market fundamentals and growth trends alongside technical indicators, Stride, sporting a Zacks Rank #1 (Strong Buy) at present, seems to offer the better upside potential for investors seeking an option with sustainable growth compared with Chegg, which is carrying a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.