Strategic Education (NASDAQ:STRA) Announces Earnings Results, Misses Estimates By $0.23 EPS

Strategic Education (NASDAQ:STRA) issued its quarterly earnings results on Thursday. The health services provider reported $1.72 EPS for the quarter, missing the consensus estimate of $1.95 by ($0.23), FiscalAI reports. Strategic Education had a return on equity of 8.98% and a net margin of 10.46%. The business had revenue of $325.07 million during the quarter, compared to the consensus estimate of $326.55 million. During the same quarter last year, the firm posted $1.64 earnings per share. Strategic Education’s revenue was up 1.6% compared to the same quarter last year.

Here are the key takeaways from Strategic Education’s conference call:

• Education Technology Services continued to grow strongly: revenue rose 12%, Sophia Learning subscribers increased 22%, and Workforce Edge had 83 corporate agreements covering about 4 million employees. Management plans to invest further in ETS in 2027, while warning that those investments will reduce its segment margin.
• U.S. healthcare remained a key growth engine. Healthcare enrollment grew 9% and reached 54% of U.S. higher education enrollment; employer-affiliated enrollment also increased. Retention hit a record 89.2%, and early demand for new nursing and radiologic technology programs exceeded expectations.
• Australia’s international student headwinds worsened: total enrollment fell 9% and revenue declined 7% amid sharply slower visa approvals and new transfer restrictions. The company recorded a $134 million non-cash impairment and lowered its near-term growth expectations for the segment.
• Management expects consolidated revenue to be flat in 2027 and said full-year 2026 results are unlikely to meet its notional outlook. Planned growth investments will cost about $50 million, though productivity savings are expected to limit operating expense growth to 2%; management expects these investments to support a return to its notional growth rates in 2028 and beyond.
• Third-quarter results were mixed: revenue was essentially flat at $320 million and operating income declined 2%, while EPS rose 4% partly due to share repurchases. Nine-month free cash flow increased 8% to $137 million, and the company ended the quarter with $139 million in cash and marketable securities and no debt.

Strategic Education Stock Down 21.3%

Shares of NASDAQ STRA traded down $15.85 during mid-day trading on Thursday, hitting $58.47. 927,455 shares of the company traded hands, compared to its average volume of 277,536. Strategic Education has a 1 year low of $57.10 and a 1 year high of $89.73. The stock has a market capitalization of $1.30 billion, a price-to-earnings ratio of 9.74, a PEG ratio of 0.69 and a beta of 0.51. The business has a 50 day moving average of $79.60 and a two-hundred day moving average of $80.19.

Analyst Ratings Changes

Several equities analysts have recently issued reports on the stock. Barrington Research set a $105.00 price objective on shares of Strategic Education in a research note on Wednesday, July 29th. Wall Street Zen upgraded shares of Strategic Education from a “hold” rating to a “buy” rating in a report on Saturday, August 1st. BMO Capital Markets cut their target price on shares of Strategic Education from $100.00 to $95.00 and set an “outperform” rating for the company in a research note on Monday, October 5th. Truist Financial raised their target price on shares of Strategic Education from $80.00 to $90.00 and gave the stock a “hold” rating in a report on Thursday, July 30th. Finally, Weiss Ratings lowered shares of Strategic Education from a “hold (c+)” rating to a “hold (c)” rating in a research report on Wednesday, October 28th. Two investment analysts have rated the stock with a Buy rating and three have given a Hold rating to the stock. According to MarketBeat, Strategic Education currently has an average rating of “Hold” and a consensus price target of $96.67.

Key Strategic Education News

Here are the key news stories impacting Strategic Education this week:

• Positive Sentiment: Revenue increased 1.6% year over year to $325.1 million, while reported EPS rose to $1.72 from $1.63 a year earlier. Revenue was close to analyst estimates. Strategic Education Q3 results
• Negative Sentiment: EPS missed consensus estimates of roughly $1.92–$1.95, and revenue of $325.1 million was slightly below the $326.6 million estimate. The shortfall was compounded by a reported $134 million Torrens writedown, which likely heightened concern about the quarter’s results. Strategic Education Q3 writedown
• Negative Sentiment: Ademi LLP said it is investigating possible securities-fraud claims against Strategic Education. This is an investigation announcement, not a finding of wrongdoing, but it may add uncertainty for investors following the selloff. Ademi LLP shareholder alert

Strategic Education Company Profile

Strategic Education, Inc (NASDAQ: STRA) is an education services company that provides postsecondary programs through Strayer University and Capella University. Its institutions serve working adults and other nontraditional students through online and campus-based learning options.

Strayer University offers undergraduate and graduate degree programs, professional certificates and other career-focused educational programs in areas such as business, information technology, health services and criminal justice.