Can Stride's 11% Enrollment Growth Outlast Its Platform Glitches?

Stride, Inc. LRN witnessed 11.3% enrollment growth in the first quarter of fiscal 2026, with Career Learning enrollments growing 20% and General Education enrollments improving 5.2%. Its diversified offerings through a career learning platform for areas like healthcare, IT and advanced manufacturing are boosting its prospects. As the market is shifting from traditional school choices to more virtual and career-oriented options, LRN’s evolving model positions it at the intersection of technology, personalized instruction and workforce readiness.

However, extensive technological involvement and digital offerings leave space for technical glitches, which is the case with Stride. From the beginning of August 2025, Stride started to witness withdrawals from its platforms, which were caused by the technical disruptions across its two technology platform rollouts, a front-end learning platform and a back-office platform. Poor customer experience resulted in lower-than-expected conversion rates.

Even though the company is currently working on fixing these technical issues, the already occurred disruptions led to projections of approximately 10,000-15,000 fewer enrollments in fiscal 2026. Moreover, based on all the adverse in-house scenarios, Stride laid out a comparatively muted fiscal 2026 outlook, even though the growth rate reflects positive trends, lowering investors’ sentiments. The management emphasized that the issues are fixable and expects major improvements within the next few months, with full stabilization targeted before fiscal 2026 ends.

If Stride can resolve its technology challenges without further eroding student experience, its strong demand trends and expanding career-focused model could quickly put it back on a growth-first footing. But for now, the company’s 11.3% enrollment uptick is battling against the clock.

Stride Stock’s Price Performance vs. Other Market Players

Shares of this Virginia-based education company have plunged 60.8% in the past three months, underperforming the Zacks Schools industry, the broader Zacks Consumer Discretionary sector and the S&P 500 Index.

Education companies like Strategic Education, Inc. STRA and American Public Education, Inc. APEI offer substantial competition to Stride in the market. In the past three months, shares of Strategic Education have lost 3%, while those of American Public Education have gained 13.8%.

LRN’s Valuation Trend

LRN stock is currently trading at a discount compared with its industry peers, with a forward 12-month price-to-earnings (P/E) ratio of 7.66, as shown in the chart below.

Notably, Strategic Education and American Public Education are currently trading at a forward 12-month P/E ratio of 12.14 and 17.05, respectively.

Earnings Estimate Revision of LRN

LRN’s earnings estimates for fiscal 2026 and fiscal 2027 have moved south over the past 30 days by 4.8% to $8.39 per share and 8.3% to $8.90 per share, respectively. The analysts’ expectations are likely to have been hurt by the ongoing in-house concerns and muted enrollment growth outlook declared by the company.

Nonetheless, the revised figures for fiscal 2026 and 2027 imply year-over-year improvements of 3.6% and 6.2%, respectively.

Stride stock currently carries a Zacks Rank #3 (Hold). 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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