The EdTech revolution is progressing rapidly! As technology advances, internet access grows swiftly, and students seek innovative learning methods, the global EdTech market is flourishing.
North America currently holds a significant 37.3% share, but regions such as the Middle East and Africa, Europe, and Asia-Pacific are gaining ground, fueled by government support, digital literacy, and a burgeoning middle class. It’s an exciting time for digital learning, and there’s even more to look forward to!
โ EdTech Market Growth Outlook
- Valuation projected to rise from $220.5 million in 2023 to $810.3 million by 2033.
- Compound Annual Growth Rate (CAGR) of 13.9%.
โ Government Initiatives Supporting EdTech Sector
- The US Department of Education has allocated $277 million in new grants through the Education Innovation and Research program to enhance educational equity and innovation, particularly in areas affected by the COVID-19 pandemic, specifically focusing on STEM education and rural regions.
Recognizing the enormous opportunity in EdTech, we’re examining a stock that exhibits remarkable growth potential within the sector.
โ Stride (NYSE:LRN) - Company OVERVIEW
Stride Inc. is a tech-driven education service provider offering proprietary and third-party online curricula, software, and services in the U.S. and globally. Their products support personalized learning for K-12 students through virtual and blended public schools, individual online courses, and supplemental materials in subjects like math, English, science, and history. Stride also emphasizes career learning in fields such as IT, healthcare, and business, and operates tuition-based private schools. Additionally, they provide post-secondary programs in software engineering and healthcare under brands like Galvanize and Tech Elevator, along with staffing services. Rebranded from K12 Inc. in December 2020, Stride has been incorporated since 1999 and is headquartered in Reston, Virginia.
Market Capitalization – $3.31 B
โ Stride (NYSE:LRN) - STOCK RECOMMENDATION
Idea | BUY |
Buy Range | 77 – 80 |
Target | 115 – 120 |
Duration | 12 – 18 Months |
Potential Returns | 45 – 50% |
Idea | Buy Range | Target | Duration | Potential Returns |
BUY | 77 – 80 | 115 – 120 | 12 – 18 Months | 45 – 50% |
* Once the first target hit, reset the StopLoss at your buying price.
Our recommendations are authentic and transparent. Find this recommendation posted in Tradingview. Be assured such records are permanent and irreversible.
โ Stride (NYSE:LRN) - Peer Companies
- Graham Holdings (NYSE: GHC) – $3.23 B
- Adtalem Global Education (NYSE: ATGE) – $2.67 B
- Grand Canyon Education (NASDAQ: LOPE) – $4.04 B
- Laureate Education (NASDAQ: LAUR) – $2.25 B
โ Stride (NYSE:LRN) - TECHNICAL ANALYSIS
Monthly
- The stock price initially faced resistance at $40 in 2011 but later found support at $17.
- Despite several attempts to break through resistance, the stock experienced significant declines.
- However, after a 12-year period, it finally broke out and rallied to a high of $84.
- Currently trading at $77.7, the stock is expected to continue rising in the near future
Daily
- The daily chart indicates a clear uptrend in the price movement.
- An ascending triangle pattern has formed, and following the breakout, the price has retraced to the breakout level.
- At this moment, the price is attempting to find support at the 50 EMA.
- From a technical standpoint, the stock is resting at a support level, making it an attractive option for accumulation with a mid to long-term investment outlook.
โ Stride (NYSE:LRN) - RELATIVE STRENGTH
Relative Performance - Last 1 Year
LRN — US Smallcap 2000 —
- The chart clearly illustrates that Stride Inc. has greatly outperformed the US Smallcap 2000 index, achieving an impressive annual return of 82%, which is a notable achievement.
โ Stride (NYSE:LRN) - Revenue & Profit Analysis
โ Year-on-year
- In FY24, revenue surged by 11.3%, reaching $2,040 million, up from $1,837 million in FY23.
- EBITDA saw a substantial boost, climbing to $295.3 million in FY24 compared to $225.2 million the previous year.
- The EBITDA margin also experienced growth, rising to 14.47% from 12.26% in FY23.
- Additionally, diluted EPS witnessed an impressive increase of 57.91%, jumping to $4.69 in FY24 from $2.97 in FY23.
โ Quarter-on-quarter
- In the latest June quarter, the company achieved a remarkable milestone with quarterly sales reaching an all-time high of $520.8 million. This marks a 3% increase from the $504.9 million recorded in the March quarter and a significant 10.75% rise compared to $470.3 million in the same quarter last year.
- EBITDA declined from $100.2 million to $82.3 million in the latest quarter, representing a 17.8% decrease.
โ Stride (NYSE:LRN) - Valuation
โ P/E RATIO
Current P/E Ratio vs. Median P/E Ratio
- The present price-to-earnings ratio for this stock is 16.2x, which is considerably below its four-year median price-to-earnings ratio of 18.9x times, indicating that the stock is currently undervalued.
Current P/E vs. Peer Average P/E
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The stock presents a favorable valuation when considering its Price-To-Earnings Ratio of 16.2x, which is lower than the average of its peers at 18.3x.
Current P/E vs. Industry Average P/E
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Stride appears to be offered at a more competitive price, featuring a Price-To-Earnings Ratio of 16.2x, which is significantly below the average of 19.2x for the US Consumer Services industry.
โ P/B Ratio
Current P/B vs. Peer Average P/B
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The present P/B ratio in relation to the average P/B of peers indicates that the stock is somewhat higher, with a ratio of 2.8x in contrast to the peer average of 2.6x.
Current P/B vs. Industry Average P/B
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When comparing the current P/B ratio to the industry average, Stride appears to be considerably overvalued, exhibiting a P/B ratio of 2.8x, while the industry average stands at 1.6x.
โ Stride (NYSE:LRN) - Cash Flow Analysis
- The cash generated from operations has experienced substantial growth in fiscal year 2024, increasing to $278.8 million from $203.2 million in fiscal year 2023.
โ Stride (NYSE:LRN) - Debt Analysis
- Stride has a total debt of $528.2 million, resulting in a debt-to-equity ratio of 0.44.
- The company generates sufficient interest income to exceed its interest expenses, indicating that interest payment coverage is not an issue.
โ Stride (NYSE:LRN) - Top Shareholders
- BlackRock Inc. holds a significant ownership interest in this company, with a notable stake of 14.9%. This level of investment reflects BlackRock’s confidence in the company’s potential for growth and profitability.
- The Vanguard Group also maintains a considerable presence, owning 10.7% of the company’s shares.
- Together, these two investment giants represent a substantial portion of the company’s equity, indicating strong institutional support and interest in its future performance.
โ Conclusion
Upon examining Stride Inc.’s financial performance, we focused on essential metrics such as revenue growth, profit margins, and the stability of cash flow. Additionally, we assessed the company’s future growth potential by looking into industry trends and the competitive landscape.
As a result, we are confident that Stride Inc. is positioned to capitalize on new opportunities while effectively navigating challenges, making it an attractive option for both investors and stakeholders.