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Strategic Education (STRA) Up 9.9% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for Strategic Education (STRA - Free Report) . Shares have added about 9.9% in that time frame, outperforming the S&P 500.
But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Strategic Education due for a pullback? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent catalysts for Strategic Education Inc. before we dive into how investors and analysts have reacted as of late.
Strategic Education Q2 Earnings Beat, Revenues Miss, Both Up Y/Y
Strategic Education, or SEI, reported mixed results for the second quarter of 2025. Its adjusted earnings topped the Zacks Consensus Estimate, while the revenues missed the same. On a year-over-year basis, both the top and bottom lines increased.
The quarter witnessed robust employer-affiliated enrollment, strong growth from Sophia Learning subscriptions and benefits from higher revenue per student.
Inside STRA’s Headlines
The company reported adjusted earnings per share (EPS) of $1.52, which topped the Zacks Consensus Estimate of $1.42 by 7%. In the year-ago quarter, it reported an adjusted EPS of $1.33.
Total revenues of $321.5 million marginally missed the consensus mark of $323 million by 0.6% but grew 2.9% from the year-ago period's level. On a constant-currency basis, revenues increased 3.6% to $323.5 million in the quarter.
Strategic Education’s Segment Details
U.S. Higher Education (USHE): This segment’s revenues inched down 0.5% year over year to $215.6 million, due to lower student enrollment. Student enrollment moved down slightly 0.8% to 86,339 from the year-ago quarter’s level. FlexPath enrollment was 23% of USHE enrollment compared with 22% a year ago.
During the quarter, the operating margin increased to 9.6% from 9.2% in the year-ago quarter.
Education Technology Services (ETS): This segment’s quarterly revenues increased year over year by 49.6% to $36.7 million, backed by solid growth in Sophia Learning subscriptions, employer-affiliated enrollment and gains from new Workforce Edge employer partnerships.
Sophia Learning’s average total subscribers increased approximately 40% from the year-ago period’s level. Employer-affiliated enrollment reached a record high of 31.8% of USHE enrollment, up from 29.3 in the year-ago period. As of June 30, Workforce Edge had a total of 80 corporate agreements, collectively employing about 3,870,000 employees.
ETS’ operating margin was 41% in the reported quarter, up 10 bps from a year ago.
Australia/New Zealand (ANZ): This segment’s revenues were $69.1 million, down 2.8% year over year, due to lower international student enrollment. On a constant-currency basis, revenues remained almost flat year over year at $71.2 million. Student enrollment within ANZ decreased 3.1% to 18,524 during the quarter compared with 19,113 in the year-ago quarter.
In the reported quarter, the segment’s operating margin was 18.4%, down from 19.8% in the year-ago period.
STRA’s Operating Highlights
Adjusted operating income was $49.1 million, up from $43.9 million in the year-ago quarter. The adjusted operating margin of 15.2% expanded 110 bps from the year-ago quarter.
Adjusted EBITDA was $68.3 million, up from $63.3 million in the year-ago quarter.
STRA’s Financial Details
As of June 30, 2025, the company had cash and cash equivalents of $133.6 million, compared with $137.1 million at 2024-end. There was no long-term debt at the second-quarter end.
Net cash provided by operating activities was $98.9 million as of the first six months of 2025, down from $101.9 million in the year-ago period. During the said time frame, capital expenditures were $21.2 million compared with $19.9 million a year ago.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
VGM Scores
Currently, Strategic Education has a average Growth Score of C, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock has a score of B on the value side, putting it in the second quintile for value investors.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Strategic Education has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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Strategic Education (STRA) Up 9.9% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Strategic Education (STRA - Free Report) . Shares have added about 9.9% in that time frame, outperforming the S&P 500.
But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is Strategic Education due for a pullback? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent catalysts for Strategic Education Inc. before we dive into how investors and analysts have reacted as of late.
Strategic Education Q2 Earnings Beat, Revenues Miss, Both Up Y/Y
Strategic Education, or SEI, reported mixed results for the second quarter of 2025. Its adjusted earnings topped the Zacks Consensus Estimate, while the revenues missed the same. On a year-over-year basis, both the top and bottom lines increased.
The quarter witnessed robust employer-affiliated enrollment, strong growth from Sophia Learning subscriptions and benefits from higher revenue per student.
Inside STRA’s Headlines
The company reported adjusted earnings per share (EPS) of $1.52, which topped the Zacks Consensus Estimate of $1.42 by 7%. In the year-ago quarter, it reported an adjusted EPS of $1.33.
Total revenues of $321.5 million marginally missed the consensus mark of $323 million by 0.6% but grew 2.9% from the year-ago period's level. On a constant-currency basis, revenues increased 3.6% to $323.5 million in the quarter.
Strategic Education’s Segment Details
U.S. Higher Education (USHE): This segment’s revenues inched down 0.5% year over year to $215.6 million, due to lower student enrollment. Student enrollment moved down slightly 0.8% to 86,339 from the year-ago quarter’s level. FlexPath enrollment was 23% of USHE enrollment compared with 22% a year ago.
During the quarter, the operating margin increased to 9.6% from 9.2% in the year-ago quarter.
Education Technology Services (ETS): This segment’s quarterly revenues increased year over year by 49.6% to $36.7 million, backed by solid growth in Sophia Learning subscriptions, employer-affiliated enrollment and gains from new Workforce Edge employer partnerships.
Sophia Learning’s average total subscribers increased approximately 40% from the year-ago period’s level. Employer-affiliated enrollment reached a record high of 31.8% of USHE enrollment, up from 29.3 in the year-ago period. As of June 30, Workforce Edge had a total of 80 corporate agreements, collectively employing about 3,870,000 employees.
ETS’ operating margin was 41% in the reported quarter, up 10 bps from a year ago.
Australia/New Zealand (ANZ): This segment’s revenues were $69.1 million, down 2.8% year over year, due to lower international student enrollment. On a constant-currency basis, revenues remained almost flat year over year at $71.2 million. Student enrollment within ANZ decreased 3.1% to 18,524 during the quarter compared with 19,113 in the year-ago quarter.
In the reported quarter, the segment’s operating margin was 18.4%, down from 19.8% in the year-ago period.
STRA’s Operating Highlights
Adjusted operating income was $49.1 million, up from $43.9 million in the year-ago quarter. The adjusted operating margin of 15.2% expanded 110 bps from the year-ago quarter.
Adjusted EBITDA was $68.3 million, up from $63.3 million in the year-ago quarter.
STRA’s Financial Details
As of June 30, 2025, the company had cash and cash equivalents of $133.6 million, compared with $137.1 million at 2024-end. There was no long-term debt at the second-quarter end.
Net cash provided by operating activities was $98.9 million as of the first six months of 2025, down from $101.9 million in the year-ago period. During the said time frame, capital expenditures were $21.2 million compared with $19.9 million a year ago.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
VGM Scores
Currently, Strategic Education has a average Growth Score of C, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock has a score of B on the value side, putting it in the second quintile for value investors.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Strategic Education has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.