Strategic Education (NASDAQ:STRA) Releases Earnings Results, Misses Estimates By $0.04 EPS

Strategic Education (NASDAQ:STRA) issued its quarterly earnings data on Wednesday. The health services provider reported $1.76 earnings per share for the quarter, missing analysts’ consensus estimates of $1.80 by ($0.04), FiscalAI reports. The firm had revenue of $337.26 million during the quarter, compared to analyst estimates of $327.55 million. Strategic Education had a return on equity of 8.78% and a net margin of 10.21%.Strategic Education’s quarterly revenue was up 4.9% compared to the same quarter last year. During the same quarter in the previous year, the firm posted $1.54 earnings per share.

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 Stock Up 6.8%

STRA traded up $5.55 during trading on Wednesday, reaching $86.94. 291,843 shares of the company’s stock were exchanged, compared to its average volume of 281,911. The company has a market capitalization of $1.97 billion, a P/E ratio of 15.38, a PEG ratio of 0.73 and a beta of 0.50. The business has a 50 day moving average price of $78.66 and a 200 day moving average price of $80.12. Strategic Education has a fifty-two week low of $69.70 and a fifty-two week high of $87.38.

Insider Buying and Selling at Strategic Education

In related news, insider Christa Hokenson sold 2,000 shares of the company’s stock in a transaction dated Thursday, June 4th. The shares were sold at an average price of $80.00, for a total value of $160,000.00. Following the sale, the insider owned 65,195 shares of the company’s stock, valued at $5,215,600. The trade was a 2.98% decrease in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which is available through this hyperlink. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Company insiders own 3.60% of the company’s stock.

Hedge Funds Weigh In On Strategic Education

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

Analysts Set New Price Targets

STRA has been the topic of several research analyst reports. Zacks Research downgraded Strategic Education from a “strong-buy” rating to a “hold” rating in a research report on Tuesday, June 2nd. Truist Financial cut their price target on Strategic Education from $85.00 to $80.00 and set a “hold” rating for the company in a report on Monday, April 27th. Barrington Research lowered their price objective on shares of Strategic Education from $105.00 to $95.00 and set an “outperform” rating on the stock in a research note on Thursday, April 23rd. Wall Street Zen cut shares of Strategic Education from a “buy” rating to a “hold” rating in a research note on Wednesday, June 24th. Finally, Weiss Ratings restated a “hold (c)” rating on shares of Strategic Education in a research report on Friday, July 17th. Two investment analysts have rated the stock with a Buy rating and three have given a Hold rating to the company. Based on data from MarketBeat.com, Strategic Education 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.