Why Stride Stock Was Moving Higher Today

Shares of Stride (NYSE: LRN), a K-12 and adult education company, were climbing today after it posted better-than-expected results in its third-quarter earnings report.

As of 11:40 a.m. ET, the stock was up 8.2%.

A kid working with a tutor in a classroom

Image source: Getty Images.

Stride takes a step forward

Stride, which provides K-12 education through its K12 brand and serves adult learners with training in healthcare and technology skills, said revenue in the third quarter rose 10.7% to $520.8 million, which topped estimates at $507.2 million.

Enrollment trends continued to move in the right direction with general education up 8.7% to 124.6 million and career learning up 9.8% to 73.8 million.

On the bottom line, adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) jumped 16% to $120.5 million, and earnings per share rose 23% to $1.60, which topped expectations at $1.43.

What's next for Stride

Investors responded favorably to the balanced growth across the K-12 and adult learning sides of the business and were also pleased with the margin expansion.

Looking ahead, the company also raised its full-year forecast to revenue of $2.025-$2.04 billion, up from a previous range of $1.99-$2.04 billion. It also hiked its adjusted operating income outlook to $280 million-$290 million from its earlier range of $265 million-$285 million.

Based on the solid quarterly results and the guidance hike, it's not surprising to see Stride moving higher today. The education stock also benefits from a modest valuation, as it trades at a price-to-earnings ratio of 16.

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Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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