Strategic Education (NASDAQ:STRA) Posts Quarterly Earnings Results, Misses Expectations By $0.04 EPS

Strategic Education (NASDAQ:STRA) posted its earnings results 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 business had revenue of $321.60 million during the quarter, compared to analyst estimates of $327.55 million. Strategic Education had a return on equity of 8.98% and a net margin of 10.46%.The company’s revenue was up 4.9% on a year-over-year basis. During the same quarter in the prior year, the company earned $1.54 EPS.

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 Price Performance

Shares of STRA traded down $2.73 during mid-day trading on Friday, hitting $82.35. The stock had a trading volume of 41,601 shares, compared to its average volume of 285,852. The firm has a market cap of $1.86 billion, a P/E ratio of 13.73, a PEG ratio of 0.81 and a beta of 0.50. The business has a fifty day moving average price of $78.94 and a 200-day moving average price of $80.17. Strategic Education has a 52 week low of $69.70 and a 52 week high of $89.73.

Strategic Education Announces Dividend

The company also recently announced a quarterly dividend, which will be paid on Monday, September 14th. Shareholders of record on Friday, September 4th will be given a $0.60 dividend. This represents a $2.40 dividend on an annualized basis and a yield of 2.9%. The ex-dividend date of this dividend is Friday, September 4th. Strategic Education’s dividend payout ratio (DPR) is currently 40.00%.

Insider Buying and Selling at Strategic Education

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

Hedge Funds Weigh In On Strategic Education

Several large investors have recently modified their holdings of the business. Allworth Financial LP raised its position in shares of Strategic Education by 88.5% in the third quarter. Allworth Financial LP now owns 294 shares of the health services provider’s stock valued at $25,000 after purchasing an additional 138 shares during the period. Osaic Holdings Inc. grew its stake in Strategic Education by 85.2% in the 2nd quarter. Osaic Holdings Inc. now owns 387 shares of the health services provider’s stock valued at $33,000 after buying an additional 178 shares in the last quarter. Canada Pension Plan Investment Board bought a new stake in Strategic Education during the 2nd quarter valued at $94,000. EverSource Wealth Advisors LLC lifted its position in shares of Strategic Education by 192.7% during the second quarter. EverSource Wealth Advisors LLC now owns 1,162 shares of the health services provider’s stock worth $99,000 after acquiring an additional 765 shares in the last quarter. Finally, Russell Investments Group Ltd. lifted its position in shares of Strategic Education by 1,566.7% during the third quarter. Russell Investments Group Ltd. now owns 2,050 shares of the health services provider’s stock worth $176,000 after acquiring an additional 1,927 shares in the last quarter. Hedge funds and other institutional investors own 93.27% of the company’s stock.

Wall Street Analysts Forecast Growth

Several equities research analysts recently issued reports on the company. Truist Financial upped their price target on Strategic Education from $80.00 to $90.00 and gave the stock a “hold” rating in a report on Thursday. Barrington Research set a $105.00 price target on shares of Strategic Education in a research report on Wednesday. Weiss Ratings restated a “hold (c)” rating on shares of Strategic Education in a report on Friday, July 17th. BMO Capital Markets lifted their target price on shares of Strategic Education from $86.00 to $91.00 and gave the stock an “outperform” rating in a research report on Monday, July 6th. Finally, Zacks Research downgraded Strategic Education from a “strong-buy” rating to a “hold” rating in a research note on Tuesday, June 2nd. Two investment analysts have rated the stock with a Buy rating and three have issued a Hold rating to the company. According to MarketBeat, the stock presently has a consensus rating of “Hold” and an average price target of $95.33.

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.