Strategic Education (NASDAQ:STRA) Posts Earnings Results, Misses Expectations 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. The firm had revenue of $325.07 million during the quarter, compared to analysts’ expectations of $326.55 million. Strategic Education had a net margin of 10.46% and a return on equity of 8.98%. The firm’s revenue was up 1.6% compared to the same quarter last year. During the same quarter last year, the company posted $1.64 EPS.

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 Trading Down 21.3%

NASDAQ:STRA traded down $15.85 on Thursday, hitting $58.47. 927,455 shares of the company’s stock traded hands, compared to its average volume of 277,536. The company has a market cap of $1.30 billion, a PE ratio of 9.74, a price-to-earnings-growth ratio of 0.69 and a beta of 0.51. Strategic Education has a 1 year low of $57.10 and a 1 year high of $89.73. The firm has a 50-day moving average price of $79.60 and a 200-day moving average price of $80.19.

Key Stories Impacting Strategic Education

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

Wall Street Analysts Forecast Growth

STRA has been the topic of several research analyst reports. Wall Street Zen upgraded shares of Strategic Education from a “hold” rating to a “buy” rating in a research report on Saturday, August 1st. Weiss Ratings downgraded shares of Strategic Education from a “hold (c+)” rating to a “hold (c)” rating in a research note on Wednesday, October 28th. Truist Financial increased their target price on Strategic Education from $80.00 to $90.00 and gave the company a “hold” rating in a report on Thursday, July 30th. Barrington Research set a $105.00 target price on Strategic Education in a research report on Wednesday, July 29th. Finally, BMO Capital Markets decreased their target price on Strategic Education from $100.00 to $95.00 and set an “outperform” rating for the company in a research report on Monday, October 5th. Two analysts have rated the stock with a Buy rating and three have assigned a Hold rating to the company. According to MarketBeat, the company has a consensus rating of “Hold” and a consensus price target of $96.67.

About Strategic Education

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.