Stride Inc (NYSE: LRN) Shares Surge After Strong Q1 Earnings

Stride Inc, a for-profit education company, saw its shares soar over 24% in premarket trading on Wednesday after reporting first-quarter earnings and revenue that exceeded expectations and providing an optimistic outlook for Q2.

During Q1, Stride reported earnings per share of $0.94, significantly surpassing the analyst estimate of $0.22. The company achieved a revenue of $551.1 million, beating the consensus estimate of $504.56 million.

Enrollments also grew by 19% year-over-year, totaling 222,600 students, with 91,700 in career learning programs, showing a 30% year-over-year increase.

Looking forward, Stride expects Q2 revenue to be between $560 million and $580 million, while full-year revenue is projected at $2.23 billion to $2.30 billion, both figures exceeding Wall Street's expectations.

In response to the positive report, analysts at Morgan Stanley raised their price target for Stride from $74 to $94. They noted that the strong results debunked previous bearish views and highlighted the resilience in virtual K12 demand, which they believe is underestimated by investors. They anticipate a significant rise in the stock based on these results, particularly after its previous -24% decline in October.

> “If you handed us this print on Sept 30th, before the stock declined -24%, we would have expected the same,” analysts said in a note on Tuesday.