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

Key Points

• Strategic Education reported EPS of $1.72, missing consensus by $0.23. Revenue rose 1.6% year over year to $325.1 million but was slightly below estimates.
• Australia’s international-student business weakened: enrollment fell 9% and revenue declined 7%, prompting a $134 million non-cash impairment and lower near-term growth expectations.
• Management expects consolidated revenue to be flat in 2027, while investing about $50 million in growth initiatives; shares fell 21.3% on Thursday. Education technology and U.S. healthcare remained growth areas.

Strategic Education (NASDAQ:STRA - Get Free Report) 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.

This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to contact@marketbeat.com.