Strategic Education (NASDAQ:STRA) Issues Earnings Results

Strategic Education (NASDAQ:STRA) issued its quarterly earnings results on Wednesday. The health services provider reported $1.76 earnings per share (EPS) for the quarter, missing analysts’ consensus estimates 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 for the quarter, compared to the consensus estimate of $327.55 million. During the same period in the previous year, the business posted $1.54 earnings per share. The business’s revenue for the quarter 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 6.8%

NASDAQ STRA traded up $5.55 on Wednesday, reaching $86.94. The stock had a trading volume of 291,843 shares, compared to its average volume of 281,911. Strategic Education has a 1 year low of $69.70 and a 1 year high of $87.38. The business has a 50 day moving average price of $78.66 and a 200 day moving average price of $80.12. The company has a market capitalization of $1.97 billion, a price-to-earnings ratio of 15.38, a P/E/G ratio of 0.73 and a beta of 0.50.

Insider Activity at Strategic Education

In related news, insider Christa Hokenson sold 2,000 shares of the stock in a transaction that occurred on Thursday, June 4th. The stock was sold at an average price of $80.00, for a total value of $160,000.00. Following the transaction, the insider owned 65,195 shares in the company, valued at approximately $5,215,600. This represents a 2.98% decrease in their ownership of the stock. The transaction was disclosed in a filing with the SEC, which is accessible through this link. 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

Hedge funds have recently modified their holdings of the business. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. lifted its stake in shares of Strategic Education by 3.1% in the 1st quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. now owns 16,195 shares of the health services provider’s stock valued at $1,360,000 after purchasing an additional 487 shares during the last quarter. Jane Street Group LLC raised its holdings in Strategic Education by 40.2% during the first quarter. Jane Street Group LLC now owns 43,433 shares of the health services provider’s stock valued at $3,647,000 after buying an additional 12,444 shares in the last quarter. EverSource Wealth Advisors LLC lifted its position in shares of Strategic Education by 192.7% in the second quarter. EverSource Wealth Advisors LLC now owns 1,162 shares of the health services provider’s stock worth $99,000 after buying an additional 765 shares during the last quarter. First Trust Advisors LP lifted its position in shares of Strategic Education by 20.0% in the second quarter. First Trust Advisors LP now owns 24,657 shares of the health services provider’s stock worth $2,099,000 after buying an additional 4,118 shares during the last quarter. Finally, Jump Financial LLC bought a new stake in shares of Strategic Education during the 2nd quarter worth about $246,000. Institutional investors and hedge funds own 93.27% of the company’s stock.

Wall Street Analyst Weigh In

STRA has been the topic of a number of research analyst reports. Wall Street Zen lowered Strategic Education from a “buy” rating to a “hold” rating in a report on Wednesday, June 24th. Weiss Ratings reaffirmed a “hold (c)” rating on shares of Strategic Education in a research note on Friday, July 17th. Truist Financial reduced their target price on shares of Strategic Education from $85.00 to $80.00 and set a “hold” rating for the company in a report on Monday, April 27th. BMO Capital Markets increased their price objective on Strategic Education from $86.00 to $91.00 and gave the company an “outperform” rating in a research report on Monday, July 6th. Finally, Zacks Research lowered Strategic Education from a “strong-buy” rating to a “hold” rating in a research report on Tuesday, June 2nd. Two equities research analysts have rated the stock with a Buy rating and three have assigned a Hold rating to the company. According to data from MarketBeat, the stock has a consensus rating of “Hold” and an average target price of $88.67.

About Strategic Education

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.