Stride (LRN) Stock Forecast & Price Target

Stride Inc. has demonstrated a solid financial performance, highlighted by a gross margin expansion of 30 basis points year-over-year, reaching 41.1%, which reflects effective cost management and strategic investments in technology. The company reported an 8% year-over-year increase in total enrollment, reaching 248,500 students, driven by strong growth in Career Learning programs, indicating a robust demand for its educational offerings. Furthermore, Stride's revenue for the second quarter increased by 7.5% year-over-year to $631.3 million, surpassing both internal estimates and market consensus, reinforcing a positive outlook for future growth.

Stride Inc. is facing significant operational challenges, as evidenced by a 58.9% decrease in cash flow from operations, which fell to $91.8 million in the second quarter. The company's revenue per enrollment is expected to remain flat for FY/26, while reduced enrollment figures—10,000 to 15,000 fewer than anticipated—are partly due to poor customer experience and issues with a new technology platform. Additionally, adjusted operating income projections for FY/26 are estimated at $130-140 million, reflecting a decline and falling short of both internal estimates and market expectations.