Stride (LRN) Stock Forecast & Price Target

Stride Inc. has demonstrated a solid financial performance with a gross margin expansion of 30 basis points year-over-year, reaching 41.1%, as investments in technology were effectively balanced by operational savings. The company reported a noteworthy 8% year-over-year increase in total enrollment, reaching 248.5K, reflecting robust growth particularly in Career Learning programs, which saw a 17.6% rise. Additionally, Stride's revenue for the second quarter increased by 7.5% to $631.3 million, exceeding both internal estimates and market consensus, further supporting a positive outlook for the company's financial trajectory.

Stride Inc. experienced a significant decline in cash flow from operations, which decreased by 58.9% to $91.8 million in the second quarter, raising concerns about the company's financial stability. Additionally, management anticipates flat revenue per enrollment for FY/26 compared to FY/25, while fall term enrollment saw a reduction of 10,000 to 15,000 students due to a poor customer experience, leading to higher withdrawal and lower conversion rates. Furthermore, gross margins fell slightly to 39.0%, missing both management estimates and consensus expectations, reflecting ongoing operational challenges and potentially limiting future profitability.