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K-12 Education Is Changing: Can Stride Lead the Next 25 Years?

K-12 Education Is Changing: Can Stride Lead the Next 25 Years?

Yahoo2 days ago
Stride, Inc. LRN continues to redefine digital education at a time when dissatisfaction with traditional public schooling is hitting historic highs. In its fiscal third-quarter 2025, this online education provider reported a 17.8% year-over-year revenue jump to $613.4 million—beating estimates by $20 million—driven by a 21% surge in total enrollment. Career learning revenue alone grew 33% to $223.9 million, bolstered by 34% enrollment growth.These numbers highlight the structural tailwinds favoring Stride. As highlighted by the company in its fiscal third-quarter earnings call, February Gallup Polls suggest that nearly 90% of parents now explore non-college career paths for their children, and more than 15% have considered full-time online schooling—up sharply from pre-pandemic levels. Stride is actively meeting that demand through its career-focused middle and high school programs, tutoring platforms, and innovations like K12 Zone and geo-based social pods that blend digital and real-world interaction.Importantly, management raised its full-year revenue and operating income guidance for fiscal 2025 and is already on track to surpass its 2028 CAGR targets three years early. Despite a slight EPS miss due to higher share count from convertible notes, Stride's fundamentals remain robust, with adjusted operating income up 47% and gross margin expanding 190 basis points to 40.6%.Yet, challenges remain. State-level enrollment caps and the lack of traction in lower grades could limit upside. Still, if Stride can expand its footprint and capitalize on shifting education preferences, its ambitions to lead the next 25 years of K-12 innovation may not be far-fetched.
Can Stride Stay Ahead of Chegg and Coursera in Online Learning?
As Stride charts its path for the next 25 years of K-12 transformation, competitors like Chegg CHGG and Coursera COUR are also shaping the future of digital education—albeit through different models. Chegg, best known for its study tools and textbook services, is pivoting toward AI-driven learning support. While Chegg doesn't directly compete in K-12 full-time enrollment, its tools increasingly serve high schoolers preparing for college or workforce credentials. Chegg's push into personalized learning may pressure Stride to deepen its academic support offerings.Coursera, meanwhile, is expanding its footprint in online credentialing and high school dual-enrollment programs. Coursera has partnered with universities and governments to offer scalable, low-cost education alternatives—posing a growing challenge to Stride as career education becomes mainstream in K-12. As Stride strengthens its middle and high school pathways, it must continue to differentiate itself from both Chegg and Coursera to maintain its leadership.
LRN Stock's Price Performance
Shares of this Virginia-based education company have trended downward 8.3% over the past three months, underperforming the Zacks Schools industry and the S&P 500 index.
LRN Share Price Performance
Image Source: Zacks Investment Research
Stride's Valuation Trend
Stride stock is currently trading at a discount compared with the industry peers, with a forward 12-month price-to-earnings (P/E) ratio of 2.17, as evidenced by the chart below.
LRN Valuation
Image Source: Zacks Investment Research
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
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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Stride, Inc. (LRN) : Free Stock Analysis Report
Chegg, Inc. (CHGG) : Free Stock Analysis Report
Coursera, Inc. (COUR) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
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2 Healthcare Stocks That Are Losing to the S&P 500 This Year
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2 Healthcare Stocks That Are Losing to the S&P 500 This Year

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