Strategic Education (NASDAQ:STRA) Posts Quarterly Earnings Results

Strategic Education (NASDAQ:STRA) posted its quarterly earnings results on Thursday. The health services provider reported $1.74 earnings per share for the quarter, topping analysts’ consensus estimates of $1.47 by $0.27, FiscalAI reports. The business had revenue of $311.46 million for the quarter, compared to analysts’ expectations of $322.29 million. Strategic Education had a net margin of 9.98% and a return on equity of 8.73%. The business’s revenue for the quarter was up 3.8% on a year-over-year basis. During the same period in the prior year, the company posted $1.27 EPS.

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

• Strong Q4 and full‑year results — revenue increased 4% (constant currency), Q4 operating income grew 35% with a 390 bps margin expansion to 16.9%, and adjusted EPS rose materially (Q4 $1.75; FY $6.21).
• AI‑driven productivity delivered ~ $30M of expense savings in 2025 and management expects at least an additional $70M of savings through 2027, with savings earmarked to fund growth and expand margins.
• Education Technology Services was a standout — revenue grew >40% to nearly $150M, operating income rose 38% with a 40% margin, and Sophia Learning subscribers and revenue posted very strong growth.
• Enrollment pressures remain a concern — total U.S. higher‑education enrollment declined (driven by unaffiliated students) even as employer‑affiliated enrollment reached a record 33.5%, and ANZ enrollment was down ~2% due to international regulatory constraints.
• Healthy cash generation and returns — $247M cash from operations, $154M distributable FCF, returned roughly $198M through dividends and ~$140M of buybacks (1.7M shares, ~7%), ended year with $153M cash, no debt, and >$200M remaining on the repurchase authorization.

Strategic Education Stock Up 4.9%

Shares of Strategic Education stock traded up $3.87 during trading on Friday, hitting $82.28. 561,068 shares of the company were exchanged, compared to its average volume of 250,934. Strategic Education has a fifty-two week low of $72.17 and a fifty-two week high of $93.45. The firm has a 50 day moving average price of $81.07 and a 200 day moving average price of $80.73. The stock has a market capitalization of $1.93 billion, a price-to-earnings ratio of 15.18, a P/E/G ratio of 0.81 and a beta of 0.55.

Strategic Education Announces Dividend

The firm also recently disclosed a quarterly dividend, which will be paid on Monday, March 16th. Stockholders of record on Monday, March 9th will be paid a dividend of $0.60 per share. This represents a $2.40 dividend on an annualized basis and a dividend yield of 2.9%. The ex-dividend date of this dividend is Monday, March 9th. Strategic Education’s dividend payout ratio (DPR) is 44.28%.

Key Stories Impacting Strategic Education

Here are the key news stories impacting Strategic Education this week:

• Positive Sentiment: Q4 EPS beat — STRA reported $1.74 EPS vs. a $1.47 consensus, driving upside to estimates and supporting the stock. Read More.
• Positive Sentiment: Management announced an additional $70M of AI-driven expense savings through 2027 and plans to expand employer-focused enrollment channels — a structural margin lever that supports longer‑term profitability. Read More.
• Positive Sentiment: Dividend declared — a $0.60 quarterly payout (ex-dividend March 9, paid March 16) yields ~3.0% and increases income appeal for yield-seeking investors.
• Neutral Sentiment: Top-line mixed — revenue of $311.46M was up 3.8% YoY but came in below analyst expectations (~$322.3M), leaving the growth outlook ambiguous despite the EPS beat. Read More.
• Neutral Sentiment: Earnings materials available — full Q4 2025 call transcript and slide deck give detail on enrollment trends, margin drivers and the rollout of cost savings for investors who want management color. Read More.
• Negative Sentiment: Enrollment headwinds flagged — coverage highlights risk that weaker enrollments could constrain future revenue growth and limit the benefit of margin initiatives. Read More.
• Negative Sentiment: Insider selling — CEO Raymond McDonnell sold 38,840 shares (~$2.93M) late February, cutting his stake by ~26.8%, which some investors may view as a negative signal. Read More.

Analyst Ratings Changes

A number of analysts recently commented on the stock. Weiss Ratings reissued a “hold (c)” rating on shares of Strategic Education in a report on Thursday, January 22nd. Wall Street Zen raised Strategic Education from a “buy” rating to a “strong-buy” rating in a research note on Saturday. Finally, Barrington Research restated an “outperform” rating and issued a $105.00 price target on shares of Strategic Education in a report on Monday, January 26th. Two equities research analysts have rated the stock with a Buy rating and one has issued a Hold rating to the company’s stock. According to data from MarketBeat.com, Strategic Education currently has a consensus rating of “Moderate Buy” and an average target price of $99.33.

Insider Buying and Selling

In other Strategic Education news, CEO Raymond Karl Mcdonnell sold 38,840 shares of the firm’s stock in a transaction on Tuesday, February 24th. The stock was sold at an average price of $75.35, for a total transaction of $2,926,594.00. Following the completion of the transaction, the chief executive officer owned 106,332 shares of the company’s stock, valued at approximately $8,012,116.20. This trade represents a 26.75% decrease in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which is accessible through this link. Company insiders own 3.30% of the company’s stock.

Institutional Trading of Strategic Education

A number of large investors have recently made changes to their positions in the stock. Bank of Montreal Can grew its holdings in Strategic Education by 62,355.4% in the fourth quarter. Bank of Montreal Can now owns 1,467,702 shares of the health services provider’s stock valued at $117,710,000 after purchasing an additional 1,465,352 shares during the period. State Street Corp grew its stake in shares of Strategic Education by 0.8% during the 4th quarter. State Street Corp now owns 881,089 shares of the health services provider’s stock valued at $70,663,000 after buying an additional 6,737 shares during the period. Geode Capital Management LLC increased its holdings in shares of Strategic Education by 0.3% during the 4th quarter. Geode Capital Management LLC now owns 609,040 shares of the health services provider’s stock worth $48,853,000 after buying an additional 1,579 shares during the last quarter. Charles Schwab Investment Management Inc. increased its holdings in shares of Strategic Education by 3.6% during the 4th quarter. Charles Schwab Investment Management Inc. now owns 351,969 shares of the health services provider’s stock worth $28,228,000 after buying an additional 12,244 shares during the last quarter. Finally, Arrowstreet Capital Limited Partnership raised its position in shares of Strategic Education by 27.0% in the 3rd quarter. Arrowstreet Capital Limited Partnership now owns 332,767 shares of the health services provider’s stock worth $28,621,000 after buying an additional 70,732 shares during the period. Institutional investors and hedge funds own 93.27% of the company’s stock.

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.