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Bull Of The Day: Stride (LRN)

This education company has some great growth and estimates keep moving higher.

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This story originally appeared on Zacks

Stride (LRN) is a Zacks  Rank #1 (Strong Buy) and sports a Zacks Style Score of A for Value and B for Growth.  This is a career learning business that is more than just schooling, it also has a job placement arm as it helps customers throughout the career lifecycle.  Let’s take a deeper look at this stock in this Bull of the Day article.

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Description

Stride Inc. is a premier provider of K-12 education for students, schools and districts, including career learning services through middle and high school curriculum. For adult learners, the company delivers professional skills training in healthcare and technology, as well as staffing and talent development. Stride Inc., formerly known as K12 Inc., is based in Herndon, United States.

Earnings History

When I look at a stock, the first thing I do is look to see if the company is beating the number.  This tells me right away where the market’s expectations have been for the company and how management has communicated to the market.  A stock that consistently beats has management communicating expectations to Wall Street that can be achieved.  That is what you want to see.

For LRN, I see a great history of beating the Zacks Consensus Estimate.  There are four beats over the last four quarters. 

The average positive earnings surprise over the last fours quarters works out to be 69%, which means that they are posting results that are above expectations. 

Earnings Estimates Revisions

The Zacks Rank tells us which stocks are seeing earnings estimates move higher.  For LRN, I see estimates moving higher.

Over the last 60 days, I see a few increases.

This quarter has moved from $0.12 to $0.22.

Next quarter has moved from $0.56 to $0.69.

The full-year number has increased from $1.43 to $2.02 over the last 60 days.

Next year is at $1.72 and that is up from $2.26 over the same time horizon.

Positive movement in earnings estimates like that is why this stock is a Zacks Rank #1 (Strong Buy).

Valuation

The valuation for LRN is very reasonable.  I see an 16x forward earnings multiple and sales growth in the most recent quarter coming in just over 47%.  The price to book multiple of 1.7x is a little above the industry average.  Price to sales comes in at 0.9x and I would want to see multiple at or above 1x as it would say that the market values each dollar of revenue. 

Chart

 

Stride, Inc. Price, Consensus and EPS Surprise

Stride, Inc. Price, Consensus and EPS Surprise

Stride, Inc. price-consensus-eps-surprise-chart | Stride, Inc. Quote



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