Stride vs. Chegg: Which Online Education Stock Offers Better Growth Prospects?

Stride, Inc. (LRN) and Chegg, Inc. (CHGG) are two online education companies focusing on different segments of the edtech market. Stride mainly offers full-time online K-12 programs, while Chegg operates a direct-to-consumer subscription model. Stride has seen record enrollment growth trends, driven by demand for online full-time K-12 programs and career education. Chegg's subscriber base has declined, and its Chegg Skills contribution has decreased due to lower enrollments and competition from free AI tools. Stride's strategic investments and focus on reaching fiscal 2028 targets position it well for future growth.

Stride, Inc. (LRN) and Chegg, Inc. (CHGG) are two prominent players in the online education sector, each targeting different segments of the edtech market. Stride focuses on full-time online K-12 programs and career education, while Chegg operates a direct-to-consumer subscription model for college and post-secondary learners.

Stride has witnessed remarkable enrollment growth, particularly in its Career Learning segment. During the first nine months of fiscal 2025, Stride's enrollment across its General Education and Career Learning segments increased by 12.8% and 32%, respectively, leading to an overall growth of 20% [2]. This trend is driven by strong demand for online full-time K-12 programs and career education. Additionally, Stride's strategic investments in school-as-a-service offerings and personalized learning models position it well for future growth [2].

Chegg, on the other hand, has faced challenges in recent quarters. Its subscriber base has declined, and the contribution from Chegg Skills has decreased due to lower enrollments and competition from free AI tools. In the first quarter of 2025, Chegg's net revenues declined by 30% year-over-year, primarily due to a 30% drop in Subscription Services revenues and a 32% tumble in Skills and Other revenues [2].

Despite these challenges, Chegg is piloting new programs, such as EdifyOnline and Noodle, to expand its service offerings and minimize competition headwinds. The company is also optimistic about its reinvented Chegg Skills product, which offers skill-building services for the modern workforce. The results from these offerings are expected to boost Chegg's market share and foster revenue visibility in 2026 [2].

In terms of stock performance and valuation, Stride has outperformed Chegg. Stride's share price performance has been stronger than Chegg's year-to-date, and it is trading above Chegg on a forward 12-month price-to-sales (P/S) ratio basis [2]. Additionally, Stride's earnings per share (EPS) estimates for fiscal 2025 and 2026 indicate significant growth, while Chegg's EPS estimates have trended downward over the past 30 days [2].

Based on market fundamentals and growth trends, Stride appears to offer better upside potential for investors seeking sustainable growth compared to Chegg. Stride's diversified offerings and strong market trends back its revenue visibility and bottom-line growth. Chegg, while facing current challenges, is piloting new programs that could boost its market share and foster revenue visibility in the future.

References:
[1] https://finance.yahoo.com/quote/LRN/
[2] https://www.barchart.com/story/news/32786943/stride-vs-chegg-which-online-education-stock-is-a-smarter-buy
[3] https://nz.finance.yahoo.com/quote/LRN/