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Is Stride's $1.52 EPS a Glimpse of a Post-Tech-Recovery Upside?
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Key Takeaways
Stride delivered $1.52 adjusted EPS in Q1 FY26 despite tech platform disruptions starting in August 2025.
LRN's Career Learning segment drove results, with enrollment rising 20% year over year and higher margins.
Stride expects tech remediation through FY26, with earnings estimates for FY26 and FY27 revised upward.
Stride, Inc. (LRN - Free Report) started fiscal 2026 rough due to the technical glitches that started in August 2025 concerning the poor platform performance of its two new technology platforms, a front-end learning platform and a back-office platform. Despite these headwinds, Stride still delivered double-digit revenue growth and strong profitability, underscoring the scalability of its cost structure in the first quarter of fiscal 2026.
The primary growth driver was the continued strong momentum in the Career Learning segment, with enrollment growing 20% year over year, driven by demand for career-oriented programs aligned with workforce needs. These offerings typically generate higher revenue per student and benefit from favorable margins, providing an important earnings lever as LRN diversifies beyond its core K-12 online programs. Management noted that Career Learning remains a long-term growth engine and a stabilizer during periods of operational transition.
Looking ahead, Stride expects technology remediation efforts with platform partners to progress throughout fiscal 2026, with the most material improvements occurring over the next several months. While management has tempered near-term enrollment growth expectations (10,000-15,000 fewer enrollments in fiscal 2026), it reiterated confidence in returning to historical in-year growth once systems stabilize. If that recovery materializes, LRN’s demonstrated ability to generate adjusted earnings per share (EPS) of $1.52 during a disrupted quarter suggests meaningful upside potential in a post-tech-recovery environment.
In that context, the adjusted EPS figure may be less a peak and more a baseline, offering a glimpse of what Stride’s earnings profile could look like when operational execution and demand trends are fully aligned.
Earnings Estimate Revision of LRN
LRN’s earnings estimates for fiscal 2026 and fiscal 2027 have moved north in the past seven days. The analysts’ optimism is expected to have been boosted by the ongoing recovery efforts undertaken by the firm to fix its near-term issues and maintain the growth trend through a diversified portfolio.
Image Source: Zacks Investment Research
The revised figures for fiscal 2026 and fiscal 2027 imply year-over-year improvements of 3.1% and 8.6%, respectively.
Image Source: Zacks Investment Research
Stride Stock’s Price Performance vs. Other Market Players
Shares of this Virginia-based education company have gained 3.9% in the past month, underperforming the Zacks Schools industry, but outperforming the broader Zacks Consumer Discretionary sector and the S&P 500 Index.
Image Source: Zacks Investment Research
Notably, 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 3.8% and 8.3%, respectively.
LRN’s Discounted Valuation
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 7.52, 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 12.39 and 17.21, respectively.
Image: Bigstock
Is Stride's $1.52 EPS a Glimpse of a Post-Tech-Recovery Upside?
Key Takeaways
Stride, Inc. (LRN - Free Report) started fiscal 2026 rough due to the technical glitches that started in August 2025 concerning the poor platform performance of its two new technology platforms, a front-end learning platform and a back-office platform. Despite these headwinds, Stride still delivered double-digit revenue growth and strong profitability, underscoring the scalability of its cost structure in the first quarter of fiscal 2026.
The primary growth driver was the continued strong momentum in the Career Learning segment, with enrollment growing 20% year over year, driven by demand for career-oriented programs aligned with workforce needs. These offerings typically generate higher revenue per student and benefit from favorable margins, providing an important earnings lever as LRN diversifies beyond its core K-12 online programs. Management noted that Career Learning remains a long-term growth engine and a stabilizer during periods of operational transition.
Looking ahead, Stride expects technology remediation efforts with platform partners to progress throughout fiscal 2026, with the most material improvements occurring over the next several months. While management has tempered near-term enrollment growth expectations (10,000-15,000 fewer enrollments in fiscal 2026), it reiterated confidence in returning to historical in-year growth once systems stabilize. If that recovery materializes, LRN’s demonstrated ability to generate adjusted earnings per share (EPS) of $1.52 during a disrupted quarter suggests meaningful upside potential in a post-tech-recovery environment.
In that context, the adjusted EPS figure may be less a peak and more a baseline, offering a glimpse of what Stride’s earnings profile could look like when operational execution and demand trends are fully aligned.
Earnings Estimate Revision of LRN
LRN’s earnings estimates for fiscal 2026 and fiscal 2027 have moved north in the past seven days. The analysts’ optimism is expected to have been boosted by the ongoing recovery efforts undertaken by the firm to fix its near-term issues and maintain the growth trend through a diversified portfolio.
Image Source: Zacks Investment Research
The revised figures for fiscal 2026 and fiscal 2027 imply year-over-year improvements of 3.1% and 8.6%, respectively.
Image Source: Zacks Investment Research
Stride Stock’s Price Performance vs. Other Market Players
Shares of this Virginia-based education company have gained 3.9% in the past month, underperforming the Zacks Schools industry, but outperforming the broader Zacks Consumer Discretionary sector and the S&P 500 Index.
Image Source: Zacks Investment Research
Notably, 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 3.8% and 8.3%, respectively.
LRN’s Discounted Valuation
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 7.52, 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 12.39 and 17.21, 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.