Stride (LRN) is under renewed scrutiny after a New Mexico school district filed a formal SEC complaint alleging serious misconduct, including inflating enrollment numbers and improper staffing. In addition, a shareholder rights law firm has launched an investigation into the company’s disclosure practices.
See our latest analysis for Stride.
Stride’s latest controversy arrives just after a year of remarkable gains. Its total shareholder return soared 101% over the past twelve months, handily outpacing most of its Russell 2000 peers. While the shares cooled slightly this month, longer-term momentum remains strong. This has been aided by steady enrollment growth and optimism about the company’s ability to capitalize on shifts toward online education, even if the market is now reassessing risk after the SEC complaint.
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With growth still outpacing peers and shares trading at a double-digit discount to analyst targets, investors must ask whether Stride is attractively undervalued or if the market has already accounted for its future gains.
Stride’s most widely followed valuation narrative sees significant upside, with the stated fair value well above the latest close. This gap centers on high conviction in the company’s ability to expand margins and capture new growth markets.
Persistent double-digit enrollment growth and robust application volumes signal accelerating demand for flexible, digital, and alternative education offerings. This implies sustainable revenue growth as families seek personalized, remote learning options. Expansion of tutoring and career-focused learning solutions, both internally and as externally monetizable offerings, positions Stride to capture additional revenue streams amid rising emphasis on lifelong learning and workforce reskilling.
Curious what bold assumptions fuel this valuation? The narrative hinges on aggressive top-line growth and higher profit margins rarely seen in the sector. Find out which specific forecasts drive such a high fair value and why consensus believes Stride could break out from the pack.
Result: Fair Value of $167.50 (UNDERVALUED)
Have a read of the narrative in full and understand what’s behind the forecasts.
However, stricter enrollment caps in key states and unpredictable education funding could quickly upend growth forecasts and test investors’ confidence in Stride’s outlook.
Find out about the key risks to this Stride narrative.
If you see a different side to Stride’s story or want to dig into the numbers yourself, it’s easy to build your own narrative in just a few minutes: Do it your way.
A good starting point is our analysis highlighting 3 key rewards investors are optimistic about regarding Stride.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include LRN.
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