Stride, Inc. was established in 2000 and is headquartered in Virginia, US. It is a tech company that offers an educational platform for online learning to students across the United States. The company provides a variety of services, including K-12 education, career learning, professional skills training, and talent development. Stride's platform includes products and services designed to attract, enroll, educate, monitor progress, and support students. These offerings encompass curriculum, systems, instruction, and support services, all aimed at helping learners of all ages achieve their full potential through engaging teaching and personalized learning.
The platform targets two key markets within the K-12 sector: General Education and Career Learning. General Education products and services focus on core subjects for students from kindergarten through twelfth grade, building a solid foundation of knowledge. Career Learning products and services are geared towards developing skills necessary for entering and thriving in high-growth, in-demand industries. The company has about 7,800 employees.
Surpassing analysts' expectations
Stride released its Q3 25 results on April 29, 2025, with revenue up 17.7% y/y, reaching $613m, driven by increased enrollment. Operating income rose by 45% to $145m, with margins expanding from 19.2% to 23.7%. Net profit increased by 42.6% to $99.4m. Notably, the company marked the seventh consecutive quarter surpassing analysts' revenue expectations.
Industry outlook
The game-based learning market is expected to grow at a CAGR of 23.4% from $6.2bn in FY 25 to $17.8bn by FY 30. This growth is driven by the increasing demand for engaging teaching resources, the rise of digital learning environments, and the widespread use of smartphones and the internet. Enhanced learner retention, personalized learning experiences, and the integration of advanced technologies like AI, AR, and VR further propel the market.
The shift towards competency-driven and skill-based education supports long-term growth. Web-based deployment will dominate the market due to its accessibility, platform independence, and ease of integration. The medical and healthcare training segment is expected to grow rapidly, benefiting from immersive, risk-free training environments enabled by VR, AR, and AI technologies. North America will lead the market, supported by advanced digital infrastructure and significant investments in edtech.
Positive FCF
Stride has posted a modest revenue CAGR of 9.9% over FY 21-24, reaching $2,040m, driven by increased demand for online education and expansion of curriculum offerings. Operating income rose impressively at a CAGR of 23.4% over the same period, reaching $295m in FY 24, with margins expanding from 10.5% to 14.5%. Net income increased with a CAGR of 41.9% to $204m in FY 24.
Net income led to a positive FCF over the last three years (FY 21-24), reaching $165m in FY 24 from $99.7m in FY 21. As a result, cash and cash equivalent increased from $386m to $501m by end-FY 24. The total debt also increased but at a slower rate from $466m to $528m during the same period. Consequently, its gearing improved from 57.9% to 44.9%.
In comparison, the company’s local peer TAL Education Group, posted a negative revenue CAGR of 20% over FY 22-25 to $2,250m in FY 24. Operating income dropped at a CAGR of minus 15.1% to $49.1m. Net income also fell at a CAGR of 57.9% to $84.6m.
Looking ahead, analysts anticipated revenue CAGR of 10.9% over FY 24-27, reaching $2,782m. In addition, analysts expect EBITDA CAGR of 19.2% to $662m, with margins expanding from 19.2% to 23.8% in FY 27, with a Net income CAGR of 27.5% to $423m. Likewise, analysts estimate an EBITDA CAGR of 111.5% and a net profit CAGR of 55.2% for TAL Education.
Analysts positive about stock
Over the past year, the company's stock has delivered impressive returns of approximately 108.2%. In comparison, TAL Education’s stock has delivered no returns over the same period.
Stride is currently trading at a P/E of 21.1x, based on the FY 25 estimated EPS of $6.7, which is higher than its 3-year historical average of 14.6x but lower than that of TAL Education’s P/E of 92.3x. In terms of EV/EBITDA, the company is currently trading at 10.1x, which is higher than its 3-year historical average of 6.5x but lower than TAL Education (131x).
Stride is monitored by six analysts; two have ‘Buy’ ratings, three have ‘Outperform’ ratings and one has a ‘Hold’ rating, with an average target price of $157.8, implying 11.5% upside potential from its current level.
Overall, the company's impressive growth and consistent performance have positioned it as a strong player in the online education market. The company's ability to surpass analyst expectations and maintain positive financial metrics reflects its strategic success and robust market demand.
However, the group faces several risks, including navigating complex state and federal educational regulations that impact funding and operations, intense competition in the crowded edtech market, which pressures pricing and innovation and the need to continuously innovate to keep pace with rapid technological advancements. In addition, economic downturns that can affect enrollment rates as households adjust their educational spending priorities.
