Stride is Wednesday's IBD Stock Of The Day as the technology-based education company bucks the trend among leading stocks and stubbornly sticks above a key technical support level amid the current market pullback.
The stock market appears to have rediscovered education stocks, as President Donald Trump looks to dismantle the U.S. Department of Education in what could mean fewer regulations for the industry. Even before Trump decided to go about "closing" the Education Department, online education looked to be here to stay, with on-demand video learning picking up momentum. As of 2023, 53% of U.S. students took at least one online course, according to Inside Higher Ed.
The rediscovery with Trump back in the White House comes as education names seemed to fall out of favor as some schools struggled amid scrutiny from Democratic administrations on sales practices and student loan defaults.
However, investors are now taking notice and Stride shares surged after the online education provider on Jan. 29 topped fiscal second-quarter earnings and sales estimates and gave current-quarter revenue guidance above estimates.
Stride reported a nearly 32% increase in earnings to $2.03 per share for its fiscal second quarter. Revenue jumped 16% to $587.2 million. Enrollments for the quarter averaged 230,600 students, up 19.4% from last year. Career Learning enrollments increased nearly 31%.
Stride also announced it expects Q3 adjusted operating income to range from $130 million to $140 million on $585 million to $600 million in revenue, ahead of FactSet forecasts for $591 million in revenue.
The company also sees full-year adjusted operating income between $430 million and $450 million on $2.32 billion to $2.355 billion in revenue. FactSet expects $2.3 billion in revenue for the year.
Stride Stock Performance
LRN shares edged up 0.16% to 140.86 during stock market action on Wednesday. The stock is holding above its 21-day exponential moving average, even as many other leading stocks have faded amid the current market pullback.
Stride stock could be building a shallow flat base, according to MarketSurge chart analysis. Investors could use Tuesday's high of 142.13 as an early entry buy point.
LRN hit an all-time high of 145 on Feb. 7 but has retreated somewhat since then, trading about 3.5% below that level on Wednesday.
The stock jumped 75% in 2024 and continued its hot run into 2025, soaring around 30% in January. Stride is now up 35% so far in 2025, leading the charge as the broader IBD Consumer Services-Education industry group has advanced just 6.9%.
Stride stock has a 21-day average true range of 2.91%. The ATR metric is available on IBD's MarketSurge charting tool. It gauges the characteristic breadth of a stock's behavior. Stocks that tend to make large jumps or dives in daily action, the kind that can trigger sell rules and shake investors out of a stock, have a high ATR. Stocks that tend to make more incremental moves have lower ATRs.
In the current, unpredictable market, IBD suggests stocks with ATRs of 3 or below.
Stride stock ranks first in its 39-stock IBD industry group. The stock has a 99 Composite Rating out of a best-possible 99. Stride also has a 98 Relative Strength Rating and a perfect 99 EPS Rating.
Other education stocks which have rallied to begin 2025 include TAL Education Group, Laureate Education and Adtalem Global Education.
Please follow Kit Norton on X @KitNorton for more coverage.
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