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Will Stride's Platform Pains Delay Its Long-Term 2028 Targets?
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Key Takeaways
Platform rollout issues are limiting Stride's FY26 enrollments by 10k-15k, pressuring near-term growth.
Long-term drivers, like Career Learning programs and AI integration, remain structurally strong.
LRN trades at a steep valuation discount, with EPS still expected to grow through 2027.
Stride, Inc. (LRN - Free Report) is currently going through a critical transition period due to the technical glitches highlighted after the rollout of two new technology platforms, a front-end learning platform and a back-office platform. Due to poor platform performance, the company witnessed lower-than-expected conversion rates and withdrawals since August 2025, compelling it to lay out a restrictive enrollment guidance for fiscal 2026. LRN now expects approximately 10,000-15,000 fewer enrollments in the fiscal year, which could have been achieved in an otherwise situation.
The management is currently working on minimizing these technical issues, but these platform challenges and operational friction raise questions regarding the near and mid-term prospects. During the Investor Day in 2023, Stride shed light on its fiscal 2028 targets, including revenues expected between $2.7 billion and $3.3 billion (10% CAGR at mid-point), adjusted operating income projected between $415 million and $585 million (20% CAGR at mid-point) and earnings per share (EPS) to be between $6.15 and $8.35 (20% CAGR at mid-point). These expectations were laid out on the back of improving macro trends, new product investments and improving margins.
The structural shift in U.S. education as families seek career-aligned and skills-based pathways is boding well for LRN’s prospects amid near-term headwinds. As the company is heavily investing in career-focused high school and adult programs, alongside integrating AI and offering affordable learning options, its mid and long-term prospects seem promising.
Stride may be navigating short-term platform pains, but its strategic pillars, Career Learning, Adult Learning expansion and AI-enabled scalability, remain intact. If execution improves as promised, the company still appears positioned to hit its 2028 targets.
Stride Stock’s Price Performance vs. Other Market Players
Shares of this Virginia-based education company have moved south 12.6% in the past month, underperforming the Zacks Schools industry, the broader Zacks Consumer Discretionary sector and the S&P 500 Index.
Image Source: Zacks Investment Research
Moreover, firms like Strategic Education, Inc. (STRA - Free Report) and American Public Education, Inc. (APEI - Free Report) offer substantial competition to Stride in the career learning and K-12 services field. In the past month, shares of Strategic Education and American Public Education have gained 4.5% and 7.7%, respectively.
LRN’s Valuation Trend
LRN stock is currently trading at a discount compared with its industry peers, with a forward 12-month price-to-earnings (P/E) ratio of 7.28, as shown in the chart below.
Image Source: Zacks Investment Research
Notably, Strategic Education and American Public Education are currently trading at a forward 12-month P/E ratio of 12.15 and 16.57, respectively.
Earnings Estimate Revision of LRN
LRN’s earnings estimates for fiscal 2026 and fiscal 2027 have moved south over the past 60 days. The analysts’ expectations are likely to have been hurt by the ongoing in-house concerns and muted enrollment growth outlook declared by the company.
Image Source: Zacks Investment Research
Nonetheless, the revised figures for fiscal 2026 and 2027 imply year-over-year improvements of 3.6% and 6.2%, respectively.
Image: Bigstock
Will Stride's Platform Pains Delay Its Long-Term 2028 Targets?
Key Takeaways
Stride, Inc. (LRN - Free Report) is currently going through a critical transition period due to the technical glitches highlighted after the rollout of two new technology platforms, a front-end learning platform and a back-office platform. Due to poor platform performance, the company witnessed lower-than-expected conversion rates and withdrawals since August 2025, compelling it to lay out a restrictive enrollment guidance for fiscal 2026. LRN now expects approximately 10,000-15,000 fewer enrollments in the fiscal year, which could have been achieved in an otherwise situation.
The management is currently working on minimizing these technical issues, but these platform challenges and operational friction raise questions regarding the near and mid-term prospects. During the Investor Day in 2023, Stride shed light on its fiscal 2028 targets, including revenues expected between $2.7 billion and $3.3 billion (10% CAGR at mid-point), adjusted operating income projected between $415 million and $585 million (20% CAGR at mid-point) and earnings per share (EPS) to be between $6.15 and $8.35 (20% CAGR at mid-point). These expectations were laid out on the back of improving macro trends, new product investments and improving margins.
The structural shift in U.S. education as families seek career-aligned and skills-based pathways is boding well for LRN’s prospects amid near-term headwinds. As the company is heavily investing in career-focused high school and adult programs, alongside integrating AI and offering affordable learning options, its mid and long-term prospects seem promising.
Stride may be navigating short-term platform pains, but its strategic pillars, Career Learning, Adult Learning expansion and AI-enabled scalability, remain intact. If execution improves as promised, the company still appears positioned to hit its 2028 targets.
Stride Stock’s Price Performance vs. Other Market Players
Shares of this Virginia-based education company have moved south 12.6% in the past month, underperforming the Zacks Schools industry, the broader Zacks Consumer Discretionary sector and the S&P 500 Index.
Image Source: Zacks Investment Research
Moreover, firms like Strategic Education, Inc. (STRA - Free Report) and American Public Education, Inc. (APEI - Free Report) offer substantial competition to Stride in the career learning and K-12 services field. In the past month, shares of Strategic Education and American Public Education have gained 4.5% and 7.7%, respectively.
LRN’s Valuation Trend
LRN stock is currently trading at a discount compared with its industry peers, with a forward 12-month price-to-earnings (P/E) ratio of 7.28, as shown in the chart below.
Image Source: Zacks Investment Research
Notably, Strategic Education and American Public Education are currently trading at a forward 12-month P/E ratio of 12.15 and 16.57, respectively.
Earnings Estimate Revision of LRN
LRN’s earnings estimates for fiscal 2026 and fiscal 2027 have moved south over the past 60 days. The analysts’ expectations are likely to have been hurt by the ongoing in-house concerns and muted enrollment growth outlook declared by the company.
Image Source: Zacks Investment Research
Nonetheless, the revised figures for fiscal 2026 and 2027 imply year-over-year improvements of 3.6% and 6.2%, respectively.
Stride stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.