Stride, Inc. (LRN): A Bull Case Theory

We came across a bullish thesis on Stride, Inc. on Asymmetric Alpha’s Substack. In this article, we will summarize the bulls’ thesis on LRN. Stride, Inc.'s share was trading at $146.40 as of October 14th. LRN’s trailing and forward P/E were 24.41 and 17.33 respectively according to Yahoo Finance.

Stride Inc. (LRN) operates in online K-12 education and has quietly evolved into a highly profitable, cash-generating business, despite being pigeonholed by the market as a niche operator. While the company’s legacy as a virtual schooling provider carries some baggage—including enrollment fluctuations, adult learning challenges, and regulatory risk—Stride has leveraged its scale and state funding model to generate compounding earnings. Its K-12 segment drives consistent double-digit revenue growth, and operating margins have expanded sharply, reflecting the ability to grow students without proportionally inflating costs.

Early-grade tutoring programs, integrated as retention tools, are creating long-term engagement pipelines, while adult learning initiatives are being restructured to stabilize and potentially contribute meaningfully to overall performance. The company has also begun applying AI enhancements to personalize learning and trim costs, further increasing operational efficiency without relying on flashy innovations.

Shares currently trade at a valuation that appears conservative relative to Stride’s operational leverage and potential tailwinds from expanding school choice policies, providing downside protection through net cash reserves and a resilient core business. If enrollment growth maintains a 10–15% trajectory and new initiatives succeed, the stock could reach the mid-$160s to $190 range, implying significant upside.

Risks remain, including regulatory shifts, scaling constraints, and the slower recovery of adult learning segments, but the asymmetry is favorable: limited downside paired with meaningful upside if the company executes. Overall, Stride represents a durable, quietly adaptive operator in the EdTech space, steadily rewiring its model for long-term growth while the market debates the future of online education.

Previously we covered a bullish thesis on Stride, Inc. (LRN) by Technical-Industry22 in October 2024, which highlighted its growth in K-12 and adult career learning, strategic acquisitions, and AI-driven learning platforms. The company's stock price has appreciated approximately by 127% since our coverage. The thesis still stands as Asymmetric Alpha shares a similar view but emphasizes operational efficiency, margin expansion, and compounding cash flows.

Stride, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 41 hedge fund portfolios held LRN at the end of the second quarter which was 36 in the previous quarter. 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.