Stride (LRN) exceeds Q2 earnings estimates and raises full-year forecast

Stride Inc., a leading education technology company, released its Q2 earnings report, outperforming market expectations and boosting investor confidence. The company showcased robust financial results, setting a strong foundation for the remainder of fiscal year 2024.

Stride's adjusted EBITDA for the second quarter came in at $118.3 million, surpassing the estimated $109 million. Total revenue for Q2 reached $504.9 million, exceeding the estimated $498 million. The company's General Education segment contributed $313.9 million in revenue, while its Total Career Learning segment reported $191.0 million in revenue.

Stride's adjusted operating income for the quarter was $94.9 million, outpacing the estimated $83.7 million. Earnings per share (EPS) stood at $1.54, surpassing analysts' expectations of $1.31.

The company announced a significant revision to its fiscal year 2024 revenue forecast, raising it to a range of $1.99 billion to $2.04 billion. Stride also revealed plans for capital expenditures in the range of $60 million to $65 million, which includes the purchase of property and equipment, capitalized software, and curriculum development costs.

In addition, the company provided insights into its projected effective tax rate for the full year, which is estimated to be between 25% and 27%. The adjusted operating income for the fiscal year is expected to fall within a range of $265 million to $285 million.

For the third quarter of fiscal year 2024, Stride forecasts revenue to be between $500 million and $520 million, with capital expenditures estimated to be in the range of $14 million to $17 million. The company anticipates its adjusted operating income for Q3 to be between $85 million and $95 million.

These results and forecasts highlight Stride's ongoing commitment to innovation and growth, as well as its ability to deliver strong financial performance. Investors and market analysts will closely monitor the company's progress in the upcoming quarters, as it works towards achieving its ambitious targets.

The technical analysis of LRN shows a robust bullish trend, evidenced by the stock price ascending well above all key moving averages and nearing the upper Bollinger Band, which signals strong buying momentum. The recent large green candlestick indicates a significant buyer-driven price increase. Volume spikes accompanying the price rise confirm this bullish sentiment. However, caution is advised as the Relative Strength Index (RSI) is approaching overbought territory, suggesting the potential for a near-term retracement or consolidation in the stock price.