Stride: A Unique Business Offering Tariff-Resilient Growth

Apr. 12, 2025 9:00 AM ETStride, Inc. (LRN) StockLRN
Gary Alexander
31.56K Followers

Summary

  • Stride is a unique for-profit education company that has seen success in selling its curriculums and working directly with school districts.
  • The company distinguishes itself by bypassing individual students and selling directly to districts (where peers like 2U have stumbled), but still maintaining double-digit growth in enrollments.
  • The company's scalable business model and significant operating margin gains highlight its efficiency, with adjusted EBITDA up 36% y/y, nearing "Rule of 40" status.
  • Stride is a "growth at a reasonable price" stock trading at ~2.4x forward revenue and ~10x forward adjusted EBITDA, makes it a compelling portfolio addition.
  • The company's business is also arguably tariff-proof, as macro conditions don't dictate spending on education and learning.

Rear view of boy with raised hand in class

Klaus Vedfelt

As a general consensus, consumers and especially investors have a skeptical view on for/profit education companies. Huge failures in the public markets in this sector are numerous, including the recently delisted 2U, which specialized in offering online graduate degree programs.

This article was written by

31.56K Followers
With combined experience of covering technology companies on Wall Street and working in Silicon Valley, and serving as an outside adviser to several seed-round startups, Gary Alexander has exposure to many of the themes shaping the industry today. He has been a regular contributor on Seeking Alpha since 2017. He has been quoted in many web publications and his articles are syndicated to company pages in popular trading apps like Robinhood.

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in LRN over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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