Can Stride Sustain Double-Digit EPS Growth as Investments Rise?

Stride, Inc. LRN continues to deliver strong operational and financial performance, supported by consistent enrollment growth and expanding service capabilities. The company reported adjusted earnings per share (EPS) of $8.10 in fiscal 2025, up 48% from $5.49 in the prior year, reflecting higher efficiency and disciplined execution. With larger investments planned for fiscal 2026, the key question is whether such double-digit earnings growth can be sustained.

The company outlined several areas of reinvestment aimed at supporting long-term expansion. A key focus is on academic improvement, with new tutoring programs for second and third graders designed to strengthen reading skills at an early stage. Stride is also allocating funds toward engagement platforms such as its K-12 learning zone, which enhances student participation and retention. In addition, the company continues to modernize its career programs to better connect students with practical learning paths.

Stride is also investing in technology to modernize its learning ecosystem, focusing on responsible adoption of artificial intelligence to improve efficiency and teaching quality. While these initiatives may result in slower margin expansion, these are expected to enhance scalability and operational performance over time.

The company anticipates continued gross margin improvement in fiscal 2026, though at a moderated pace compared with recent years. A supportive funding environment and effective cost management are likely to aid profitability despite rising investment levels. Overall, Stride’s reinvestment in innovation, technology and student success initiatives positions it well to sustain healthy, double-digit EPS growth over the long term.

Stride’s Competition in the Education Market

Stride operates in a competitive online education space, where peers like Coursera, Inc. COUR and Strategic Education, Inc. STRA continue to expand their presence. Coursera has gained recognition for the flexible programs and global reach, while Strategic Education leverages its Capella and Strayer brands to focus on affordability and career-oriented degrees for adult learners.

Stride has carved out an edge by combining academic programs with tutoring and support services, helping drive more consistent enrollment in its career-focused pathways. Coursera is advancing with AI-powered course recommendations and enterprise partnerships. Strategic Education is applying AI in student advising and skills evaluation. 

Stride is moving in a similar direction, deploying AI not only to personalize learning but also to improve tutoring and streamline administrative processes, supporting efficiency and scalability.

LRN Stock’s Price Performance & Valuation Trend

Shares of this Virginia-based education company have trended upward 39.3% year to date, outperforming the Zacks Schools industry, as shown below.

LRN Share Price Performance

LRN stock is currently trading at a premium compared with its industry peers, with a forward 12-month price-to-earnings (P/E) ratio of 15.98, as shown in the chart below.

Earnings Estimate Revision of LRN

LRN’s earnings estimates for fiscal 2026 have moved north over the past 30 days to $8.81 per share. The revised estimated figure for fiscal 2026 implies year-over-year growth of 8.8%.
 

LRN currently sports a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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