K12 (LRN) is at a 52-week high, but can investors hope for more gains in the future? We take a look at the company's fundamentals for clues.
The Zacks Earnings ESP is a great way to find potential earnings surprises. Why investors should take advantage now.
Added to the Zacks Rank #1 (Strong Buy) list this week, Stride (LRN) stock is standing out near its 52-week high of over $140 a share.
K12 (LRN) could produce exceptional returns because of its solid growth attributes.
K12 (LRN) has an impressive earnings surprise history and currently possesses the right combination of the two key ingredients for a likely beat in its next quarterly report.
Here is how K12 (LRN) and Life Time Group Holdings, Inc. (LTH) have performed compared to their sector so far this year.
Stride is a unique for-profit education company that has seen success in selling its curriculums and working directly with school districts. The company distinguishes itself by bypassing individual students and selling directly to districts (where peers like 2U have stumbled), but still maintaining double-digit growth in enrollments. The company's scalable business model and significant operating margin gains highlight its efficiency, with adjusted EBITDA up 36% y/y, nearing "Rule of 40" status.
I love that Stride, Inc. is consistently generating strong free cash flow while still growing at a healthy pace. With a net cash position covering 6% of its market cap, the balance sheet is rock solid. Paying just 15x forward free cash flow for a company with mid-teen growth rates is a no-brainer.
Stride, Inc. LRN is currently trading at a premium compared with the Schools industry peers but is undervalued in contrast to the broader Consumer Discretionary sector. The company's forward 12-month price-to-earnings (P/E) ratio is 16.79X, above the industry average of 15.11X and below the sector's valuation of 17.66X.
Stride's online K-12 education model is a secular trend, benefiting from growth and scale gains, with a 9% enrollment increase estimated for 2025. The company's high earnings visibility and operating leverage, demonstrated by a rise in EBITDA margins from 6% to 12%, underpin its strong financial outlook. Valuation is attractive at 1x PEG, with a potential price target of $185 if enrollment growth meets or exceeds 9% in September 2025.
Stride: Buy In At A Better Price Point
LRN gains post second-quarter fiscal 2025 earnings release reflecting top-line growth and an increased fiscal 2025 outlook. Dive in to know more about the stock.