Stride, Inc. (LRN) Balances Federal Investigations With Strong Underlying Business Momentum

We recently compiled a list of the 13 Best Bear Market Stocks to Buy Right Now. Stride, Inc. is one of them.

Stride, Inc. (NYSE:LRN) is an education technology company offering online learning platforms through virtual and blended public schools in the U.S., with a focus on personalized learning and career education programs such as coding bootcamps and apprenticeships.

In September 2025, Stride, Inc. (NYSE:LRN) faced significant legal and regulatory challenges. The Gallup-McKinley County Schools Board of Education filed a complaint alleging fraud, deceptive practices, and systemic violations related to enrollment reporting and student services. The complaint claims Stride inflated enrollment numbers with “ghost students,” used insufficiently licensed teachers, and prioritized profits over compliance and educational quality. The allegations triggered federal securities investigations and caused LRN’s stock to drop approximately 11% in heavy trading.

Shareholder rights firms Hagens Berman and Glancy Prongay & Murray LLP have also launched investigations on behalf of investors, examining whether LRN misled shareholders and adequately disclosed these risks. Despite these setbacks, Stride, Inc. (NYSE:LRN)’s underlying business performance remains strong, making it one of the more resilient picks among the best bear market stocks.

Despite these setbacks, Stride, Inc. (NYSE:LRN)’s underlying business performance remains strong. In Q4 FY25, the company reported 22.4% revenue growth year-over-year and over 20% increase in student enrollments, largely driven by career learning programs. Before the legal developments, the firm’s stock had been on a solid upward trajectory, reflecting consistent growth in the online education market.

While we acknowledge the potential of LRN as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.