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Can Stride Sustain 33.7% Career Learning Enrollment Growth?

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Key Takeaways

  • Career Learning enrollment grew 33.7% in Q3, driving 26.4% revenue growth to $242.6M.
  • Stride shares are up 36.2% YTD, outperforming STRA and LOPE amid surging demand for online career programs.
  • FY25 and FY26 EPS estimates of $7.09 and $7.76 imply 51.2% and 9.4% year-over-year growth, respectively.

Stride, Inc.’s (LRN - Free Report) prospects for its career learning portfolio appear promising against a favorable market demand backdrop. Currently, in the United States, parents and students are increasingly focused on non-college degrees, in addition to mainstream K-12 education. The company’s diversified career-learning programs, especially through an online education platform, perfectly align with this strategic market shift.

With parents and students shifting their demand toward career-focused and tech-based alternatives, LRN’s motivation for expanding its focus on career learning and adult certification programs is increasing. Undoubtedly, the company’s focal shift is paying off, offering it revenue visibility and profitability prospects in the upcoming period. The robust market trends alongside its diversified career-focused programs resulted in a 33.7% year-over-year enrollment growth in Stride’s Career Learning segment during the third quarter of fiscal 2025, with revenues from this segment increasing 26.4% to $242.6 million. Besides, during the first nine months of fiscal 2025, the Career Learning segment’s enrollment grew 32% year over year.

Currently, Stride offers career-focused programs to middle and high school students across highly demanded industries, including information technology, healthcare and general business. The interactive programs offered through this business allow it to enjoy a competitive advantage in the education industry.

With state budget processes ongoing, early indicators suggest a long-term positive funding environment. Moreover, LRN’s strategic investments to diversify its offerings, personalizing the learning model and improving user experience offer it a favorable pathway toward growth in the long term, despite macro risks threatening short-term prospects.

LRN Stock’s Price Performance vs Other Market Players

Shares of this Virginia-based education company have trended upward 36.2% so far this year, outperforming the Zacks Schools industry, the broader Zacks Consumer Discretionary sector and the S&P 500 index.

Zacks Investment Research
Image Source: Zacks Investment Research

Sharing space with LRN, other education firms, including Strategic Education, Inc. (STRA - Free Report) and Grand Canyon Education, Inc. (LOPE - Free Report) , seems to be benefiting from the favorable market demand backdrop for adult learning programs and tech-based alternatives. However, they are likely to be falling behind in capitalizing on the opportunities in comparison to Stride. In the year-to-date period, shares of Strategic Education have tumbled 7.9%, while those of Grand Canyon Education have gained 15.6%.

Stride’s Valuation Trend

Stride stock is currently trading at a premium compared with the industry peers, with a forward 12-month price-to-earnings (P/E) ratio of 19.95X, as evidenced by the chart below. The overvaluation of the stock compared with its industry peers indicates its strong potential in the market, given the favorable trends backing it up.

Zacks Investment Research
Image Source: Zacks Investment Research

Notably, Strategic Education and Grand Canyon Education are currently trading at a forward 12-month P/E ratio of 13.87X and 20.55X, respectively.

Earnings Estimate Revision of LRN

LRN’s earnings estimates for fiscal 2025 and 2026 have remained unchanged over the past 60 days at $7.09 and $7.76 per share, respectively. However, the estimated figures for fiscal 2025 and 2026 imply year-over-year growth of 51.2% and 9.4%, respectively.

EPS Trend

Zacks Investment Research
Image Source: Zacks Investment Research

LRN stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.


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