Strategic Education (NASDAQ:STRA) Posts Quarterly Earnings Results, Misses Expectations By $0.04 EPS

Strategic Education (NASDAQ:STRA) announced its quarterly earnings results on Wednesday. The health services provider reported $1.76 EPS for the quarter, missing the consensus estimate of $1.80 by ($0.04), FiscalAI reports. Strategic Education had a net margin of 10.21% and a return on equity of 8.78%. The firm had revenue of $337.26 million during the quarter, compared to the consensus estimate of $327.55 million. During the same period in the previous year, the firm posted $1.54 EPS. The company’s quarterly revenue was up 4.9% compared to the same quarter last year.

Here are the key takeaways from Strategic Education’s conference call:

• Strong second-quarter financial performance: Revenue rose 3% to $330 million, adjusted EPS increased 16% to $1.76, and operating margin expanded 90 basis points to 16%. Excluding a $13 million Australian labor-related charge, operating income would have increased 35% and margin reached 20%.
• Education Technology Services continued to outperform: Revenue grew 15%, operating income rose 30%, and margin expanded to 46.2%. Sophia Learning subscribers increased 32%, while Workforce Edge reached 81 corporate agreements covering 4 million employees and generated 21% enrollment growth into Strayer and Capella.
• U.S. higher education momentum improved: Employer-affiliated enrollment grew 8%, healthcare enrollment increased 11%, retention reached a record 89%, and operating income rose 56%. Management also launched Capella’s BSN pre-licensure program and expects continued benefits from its employer-healthcare strategy.
• Australia and New Zealand remained a drag: Enrollment declined 5% and revenue fell nearly 3%, primarily due to weaker international enrollment and slower-than-expected visa approvals. Management expects domestic growth to support a return to growth in early 2027, but timing remains dependent on government visa processing.
• Australia labor dispute remains unresolved: Strategic Education recorded a $13 million reserve after an appeals court ruled that grading time should be compensated separately for casual faculty. The company has appealed to Australia’s High Court and expects to learn in September or early October whether the case will be heard, while stating that instructional-model changes should prevent material ongoing cost increases.

Strategic Education Trading Up 8.1%

Strategic Education stock traded up $6.57 on Wednesday, reaching $87.96. 373,274 shares of the stock were exchanged, compared to its average volume of 282,648. Strategic Education has a twelve month low of $69.70 and a twelve month high of $87.86. The firm has a fifty day moving average price of $78.66 and a two-hundred day moving average price of $80.12. The stock has a market cap of $1.99 billion, a PE ratio of 15.45, a PEG ratio of 0.73 and a beta of 0.50.

Analysts Set New Price Targets

A number of analysts have issued reports on the stock. Zacks Research cut shares of Strategic Education from a “strong-buy” rating to a “hold” rating in a research note on Tuesday, June 2nd. Truist Financial dropped their price target on shares of Strategic Education from $85.00 to $80.00 and set a “hold” rating on the stock in a research note on Monday, April 27th. Barrington Research cut their price target on shares of Strategic Education from $105.00 to $95.00 and set an “outperform” rating on the stock in a report on Thursday, April 23rd. BMO Capital Markets lifted their price objective on shares of Strategic Education from $86.00 to $91.00 and gave the company an “outperform” rating in a research note on Monday, July 6th. Finally, Weiss Ratings reiterated a “hold (c)” rating on shares of Strategic Education in a report on Friday, July 17th. Two investment analysts have rated the stock with a Buy rating and three have assigned a Hold rating to the company’s stock. According to MarketBeat, Strategic Education presently has a consensus rating of “Hold” and a consensus price target of $88.67.

Insider Activity at Strategic Education

In related news, insider Christa Hokenson sold 2,000 shares of the business’s stock in a transaction dated Thursday, June 4th. The stock was sold at an average price of $80.00, for a total transaction of $160,000.00. Following the completion of the transaction, the insider owned 65,195 shares of the company’s stock, valued at approximately $5,215,600. The trade was a 2.98% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Insiders own 3.60% of the company’s stock.

Institutional Inflows and Outflows

Institutional investors have recently added to or reduced their stakes in the business. Orion Porfolio Solutions LLC grew its stake in shares of Strategic Education by 1.4% in the third quarter. Orion Porfolio Solutions LLC now owns 9,367 shares of the health services provider’s stock worth $806,000 after acquiring an additional 129 shares during the last quarter. Allworth Financial LP raised its stake in Strategic Education by 88.5% during the 3rd quarter. Allworth Financial LP now owns 294 shares of the health services provider’s stock valued at $25,000 after purchasing an additional 138 shares during the last quarter. Osaic Holdings Inc. boosted its holdings in Strategic Education by 85.2% in the 2nd quarter. Osaic Holdings Inc. now owns 387 shares of the health services provider’s stock valued at $33,000 after purchasing an additional 178 shares during the period. Stifel Financial Corp raised its position in shares of Strategic Education by 7.7% during the fourth quarter. Stifel Financial Corp now owns 3,352 shares of the health services provider’s stock valued at $269,000 after buying an additional 239 shares during the last quarter. Finally, Panagora Asset Management Inc. raised its position in shares of Strategic Education by 3.8% during the fourth quarter. Panagora Asset Management Inc. now owns 8,019 shares of the health services provider’s stock valued at $643,000 after buying an additional 291 shares during the last quarter. 93.27% of the stock is owned by institutional investors.

Strategic Education Company Profile

Strategic Education, Inc is a publicly traded higher education services holding company headquartered in Herndon, Virginia. Through its primary operating subsidiaries, Strayer University and Capella University, the company delivers degree programs and professional development opportunities to working adults. Its offerings span undergraduate and graduate degrees, certificates, continuing education, and workforce training in fields such as business, technology, health services, education, and public administration.

Strayer University, with a network of physical campuses across the United States complemented by an online platform, provides associate’s through doctoral degrees designed to accommodate non-traditional students.