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LRN Stock Surges 15% in 3 Months: Should Investors Buy it Now?
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Key Takeaways
Stride shares jumped 14.5% in three months, beating peers, the sector and the S&P 500.
FY25 Q4 revenues rose 22.4% to $653.6M, with EPS up to $2.29 on strong enrollment gains.
Stride projects 10% to 15% enrollment growth in Q1 FY26, supported by strong early funnel activity.
Stride, Inc. (LRN - Free Report) has delivered a solid performance in the past three months, with shares gaining 14.5%. The stock has outpaced the Zacks Schools industry, which slipped 0.9% in the same period. It has also surpassed the broader Zacks Consumer Discretionary sector, up 6.3%, and the S&P 500, which gained 9.1%.
The broader education sector has been supported by strong demand for school choice and favorable funding conditions across several states. Enrollment growth trends remain solid, with many families continuing to seek alternatives outside the traditional system. In addition, the funding environment for fiscal 2026 is expected to stay positive, with some states planning increases and federal support showing no material downside.
On Aug. 5, 2025, the company reported its fourth-quarter fiscal 2025 results, with earnings and revenues surpassing the Zacks Consensus Estimate by 25.1% and 3.9%, respectively. Since the release, the stock has surged 27.3%. Revenues increased 22.4% year over year to $653.6 million, while adjusted earnings per share rose 43.1% to $2.29. Adjusted EBITDA grew 41.3% year over year to $158.4 million. Apart from industry-specific tailwinds, the results were driven by significant enrollment growth and higher revenue per enrollment, particularly in Career Learning.
LRN Stock Outperforms Peers, Industry & Market
Image Source: Zacks Investment Research
Moreover, in the past three months, LRN stock has also outperformed some other players, including Adtalem Global Education Inc. (ATGE - Free Report) , Strategic Education, Inc. (STRA - Free Report) and Universal Technical Institute, Inc. (UTI - Free Report) . During the same time frame, shares of Adtalem grew 0.8%, while those of Strategic Education and Universal Technical tumbled 11.5% and 24.9%, respectively.
With this outperformance standing out against both competitors and the wider sector, it becomes important to consider the drivers that have helped Stride maintain its upward trajectory.
Strong Enrollment Growth: Stride continues to benefit from strong enrollment momentum, reinforcing its position in the growing school choice market. In the fourth quarter of fiscal year 2025, Stride achieved significant enrollment growth, with overall enrollments averaging 235.3K, up 21.7% year over year. The Career Learning segment notably contributed to this performance, experiencing a 33.2% increase in enrollments, reaching 97.0K compared to 72.8K in the same period last year. This strong quarterly enrollment performance was driven by the sustained demand and momentum observed in the school choice market throughout the year.
Looking ahead to fiscal year 2026, Stride, Inc. is on track for another year of strong growth. Based on current trends, Stride anticipates year-over-year enrollment growth in the range of 10% to 15% in the first quarter of fiscal year 2026. This projected double-digit growth is supported by strong early funnel activity, with application volumes serving as a reliable indicator of demand, and a general increase in families seeking alternative education options.
Technology and AI Initiatives: Technology and innovation have become central to Stride’s long-term strategy, serving as important drivers of growth and efficiency. In the fourth quarter of fiscal year 2025, the company highlighted the role of technology in strengthening its education offerings. It invested in digital learning platforms and expanded high-dosage tutoring for early-grade students to support reading proficiency. These steps reinforced Stride’s strategy of combining innovative tools with instructional programs to improve engagement and learning outcomes.
The company also noted progress in advancing artificial intelligence within its platforms. The focus is on responsible applications of AI, targeting areas where it can enhance efficiency and provide measurable benefits to students and teachers. By combining proprietary development with strategic partnerships, the company is positioning technology as a key growth enabler while maintaining its emphasis on improving customer experience. Favorable Funding Environment: Stride witnessed favorable funding in the fourth quarter of fiscal 2025, which included growth and completion funding, contributing to strong performance across both General Education and Career Learning segments. The company also saw an increase in overall revenue per enrollment by 2.4% year over year, with Career Learning revenue per enrollment specifically rising by 8.1%.
Looking ahead to fiscal 2026, Stride anticipates a fairly positive funding environment. The outlook is based on the expectations that some states will increase funding, while others will maintain current levels. Furthermore, the company does not foresee any material impact on its revenue per enrollment from changes at the federal level, as the federal government's general stance is viewed as supportive of school choice, aligning with Stride's mission. The funding environment is also expected to improve the financial profiles of Stride's partners, fostering a very healthy environment for the overall sector.
For the full year 2026, Stride expects revenue per enrollment to be relatively flat to up slightly compared to fiscal year 2025, although this can be influenced by state mix and yield.
Earnings Estimates for LRN Move Upward
Over the past 30 days, the Zacks Consensus Estimate for Stride's fiscal 2026 EPS has been revised upward, rising from $7.76 to $8.58. The estimate implies growth of 5.9% from the prior year. This upward trend reflects strong analyst confidence in the stock’s near-term prospects, supported by expectations of a favorable funding environment and steady enrollment momentum that are likely to sustain performance into fiscal year 2026.
Image Source: Zacks Investment Research
Meanwhile, Adtalem’s earnings for fiscal 2026 are projected to grow 15.3%, while Universal Technical’s earnings for the same period are expected to decline 4%. At the same time, Strategic Education’s earnings for 2026 are anticipated to increase 16.4%.
A Look at Stride Stock’s Valuation
From a valuation standpoint, the company is currently trading at a premium relative to its industry, with a forward 12-month price-to-earnings (P/E) ratio of 18.74X, 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.
Image Source: Zacks Investment Research
Moreover, LRN is priced higher than some of its industry peers, such as Adtalem and Strategic Education, which trade at 16.65X and 13.05X, respectively. However, Universal Technical is currently trading higher at 26.05X.
Final Thoughts on Stride’s Investment Case
Stride’s strong price performance, consistent enrollment gains, favorable funding backdrop, and ongoing investments in technology have positioned the company well for continued progress. The positive revisions in earnings estimates further underscore growing confidence in its near-term prospects, supported by stable demand and a constructive outlook for fiscal 2026.
With these factors in place, the stock appears well supported despite trading at a premium to some industry peers. Stride currently has a Zacks Rank #2 (Buy), reflecting its solid fundamentals and favorable setup heading into fiscal 2026. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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LRN Stock Surges 15% in 3 Months: Should Investors Buy it Now?
Key Takeaways
Stride, Inc. (LRN - Free Report) has delivered a solid performance in the past three months, with shares gaining 14.5%. The stock has outpaced the Zacks Schools industry, which slipped 0.9% in the same period. It has also surpassed the broader Zacks Consumer Discretionary sector, up 6.3%, and the S&P 500, which gained 9.1%.
The broader education sector has been supported by strong demand for school choice and favorable funding conditions across several states. Enrollment growth trends remain solid, with many families continuing to seek alternatives outside the traditional system. In addition, the funding environment for fiscal 2026 is expected to stay positive, with some states planning increases and federal support showing no material downside.
On Aug. 5, 2025, the company reported its fourth-quarter fiscal 2025 results, with earnings and revenues surpassing the Zacks Consensus Estimate by 25.1% and 3.9%, respectively. Since the release, the stock has surged 27.3%. Revenues increased 22.4% year over year to $653.6 million, while adjusted earnings per share rose 43.1% to $2.29. Adjusted EBITDA grew 41.3% year over year to $158.4 million. Apart from industry-specific tailwinds, the results were driven by significant enrollment growth and higher revenue per enrollment, particularly in Career Learning.
LRN Stock Outperforms Peers, Industry & Market
Image Source: Zacks Investment Research
Moreover, in the past three months, LRN stock has also outperformed some other players, including Adtalem Global Education Inc. (ATGE - Free Report) , Strategic Education, Inc. (STRA - Free Report) and Universal Technical Institute, Inc. (UTI - Free Report) . During the same time frame, shares of Adtalem grew 0.8%, while those of Strategic Education and Universal Technical tumbled 11.5% and 24.9%, respectively.
With this outperformance standing out against both competitors and the wider sector, it becomes important to consider the drivers that have helped Stride maintain its upward trajectory.
Strong Enrollment Growth: Stride continues to benefit from strong enrollment momentum, reinforcing its position in the growing school choice market. In the fourth quarter of fiscal year 2025, Stride achieved significant enrollment growth, with overall enrollments averaging 235.3K, up 21.7% year over year. The Career Learning segment notably contributed to this performance, experiencing a 33.2% increase in enrollments, reaching 97.0K compared to 72.8K in the same period last year. This strong quarterly enrollment performance was driven by the sustained demand and momentum observed in the school choice market throughout the year.
Looking ahead to fiscal year 2026, Stride, Inc. is on track for another year of strong growth. Based on current trends, Stride anticipates year-over-year enrollment growth in the range of 10% to 15% in the first quarter of fiscal year 2026. This projected double-digit growth is supported by strong early funnel activity, with application volumes serving as a reliable indicator of demand, and a general increase in families seeking alternative education options.
Technology and AI Initiatives: Technology and innovation have become central to Stride’s long-term strategy, serving as important drivers of growth and efficiency. In the fourth quarter of fiscal year 2025, the company highlighted the role of technology in strengthening its education offerings. It invested in digital learning platforms and expanded high-dosage tutoring for early-grade students to support reading proficiency. These steps reinforced Stride’s strategy of combining innovative tools with instructional programs to improve engagement and learning outcomes.
The company also noted progress in advancing artificial intelligence within its platforms. The focus is on responsible applications of AI, targeting areas where it can enhance efficiency and provide measurable benefits to students and teachers. By combining proprietary development with strategic partnerships, the company is positioning technology as a key growth enabler while maintaining its emphasis on improving customer experience.
Favorable Funding Environment: Stride witnessed favorable funding in the fourth quarter of fiscal 2025, which included growth and completion funding, contributing to strong performance across both General Education and Career Learning segments. The company also saw an increase in overall revenue per enrollment by 2.4% year over year, with Career Learning revenue per enrollment specifically rising by 8.1%.
Looking ahead to fiscal 2026, Stride anticipates a fairly positive funding environment. The outlook is based on the expectations that some states will increase funding, while others will maintain current levels. Furthermore, the company does not foresee any material impact on its revenue per enrollment from changes at the federal level, as the federal government's general stance is viewed as supportive of school choice, aligning with Stride's mission. The funding environment is also expected to improve the financial profiles of Stride's partners, fostering a very healthy environment for the overall sector.
For the full year 2026, Stride expects revenue per enrollment to be relatively flat to up slightly compared to fiscal year 2025, although this can be influenced by state mix and yield.
Earnings Estimates for LRN Move Upward
Over the past 30 days, the Zacks Consensus Estimate for Stride's fiscal 2026 EPS has been revised upward, rising from $7.76 to $8.58. The estimate implies growth of 5.9% from the prior year. This upward trend reflects strong analyst confidence in the stock’s near-term prospects, supported by expectations of a favorable funding environment and steady enrollment momentum that are likely to sustain performance into fiscal year 2026.
Image Source: Zacks Investment Research
Meanwhile, Adtalem’s earnings for fiscal 2026 are projected to grow 15.3%, while Universal Technical’s earnings for the same period are expected to decline 4%. At the same time, Strategic Education’s earnings for 2026 are anticipated to increase 16.4%.
A Look at Stride Stock’s Valuation
From a valuation standpoint, the company is currently trading at a premium relative to its industry, with a forward 12-month price-to-earnings (P/E) ratio of 18.74X, 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.
Image Source: Zacks Investment Research
Moreover, LRN is priced higher than some of its industry peers, such as Adtalem and Strategic Education, which trade at 16.65X and 13.05X, respectively. However, Universal Technical is currently trading higher at 26.05X.
Final Thoughts on Stride’s Investment Case
Stride’s strong price performance, consistent enrollment gains, favorable funding backdrop, and ongoing investments in technology have positioned the company well for continued progress. The positive revisions in earnings estimates further underscore growing confidence in its near-term prospects, supported by stable demand and a constructive outlook for fiscal 2026.
With these factors in place, the stock appears well supported despite trading at a premium to some industry peers. Stride currently has a Zacks Rank #2 (Buy), reflecting its solid fundamentals and favorable setup heading into fiscal 2026. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.