Strategic Education (NASDAQ:STRA) Stock Price Down 9.9% After Earnings Miss

Key Points

• Strategic Education shares fell about 9.9% after the company reported quarterly EPS of $1.72, below analyst expectations of $1.95.
• Revenue rose 1.6% year over year to $325.1 million, near forecasts, but a reported $134 million Torrens writedown weighed on results.
• The company declared a quarterly dividend of $0.60 per share, while Ademi LLP announced an investigation into potential securities-fraud claims; the investigation is not a finding of wrongdoing.

Strategic Education Inc. (NASDAQ:STRA - Get Free Report) fell 9.9% during mid-day trading on Friday after the company announced weaker than expected quarterly earnings. The company traded as low as $53.91 and last traded at $52.6910. 31,021 shares changed hands during trading, a decline of 89% from the average session volume of 287,112 shares. The stock had previously closed at $58.47.

The health services provider reported $1.72 earnings per share for the quarter, missing the consensus estimate of $1.95 by ($0.23). The firm had revenue of $325.07 million for the quarter, compared to analysts' expectations of $326.55 million. Strategic Education had a return on equity of 8.98% and a net margin of 10.46%. The firm's revenue for the quarter was up 1.6% compared to the same quarter last year. During the same quarter last year, the firm posted $1.64 earnings per share.

Strategic Education Dividend Announcement

The firm also recently announced a quarterly dividend, which will be paid on Monday, December 7th. Stockholders of record on Monday, November 30th will be paid a $0.60 dividend. This represents a $2.40 dividend on an annualized basis and a dividend yield of 4.6%. The ex-dividend date is Monday, November 30th. Strategic Education's payout ratio is presently 40.00%.

Trending Headlines about Strategic Education

Here are the key news stories impacting Strategic Education this week:

• Positive Sentiment: The company declared a quarterly dividend of $0.60 per share, payable December 7 to shareholders of record November 30. The annualized payout is $2.40 per share. Dividend announcement
• Neutral Sentiment: Third-quarter revenue rose 1.6% year over year to $325.1 million, roughly in line with estimates. EPS increased from $1.64 a year earlier to $1.72, but still fell short of analysts’ expectations. Third-quarter results
• Negative Sentiment: The key concern is the earnings miss: EPS of $1.72 was below consensus estimates of about $1.92–$1.95. Coverage also cited a roughly $134 million Torrens writedown as a significant factor behind the weak results, weighing on sentiment despite modest revenue growth. Torrens writedown coverage
• Negative Sentiment: Ademi LLP said it is investigating potential securities-fraud claims against Strategic Education. The announcement is an investigation, not a finding of wrongdoing, but adds a legal overhang following the stock’s sharp decline. Shareholder investigation notice

Analyst Ratings Changes

A number of analysts recently commented on STRA shares. Wall Street Zen raised Strategic Education from a "hold" rating to a "buy" rating in a research report on Saturday, August 1st. BMO Capital Markets cut Strategic Education from an "outperform" rating to a "market perform" rating and cut their price objective for the stock from $95.00 to $66.00 in a research report on Friday. Barrington Research set a $105.00 price objective on Strategic Education in a research note on Wednesday, July 29th. William Blair lowered Strategic Education to a "market perform" rating in a research report on Friday. Finally, Weiss Ratings downgraded shares of Strategic Education from a "hold (c+)" rating to a "hold (c)" rating in a research report on Wednesday, October 28th. One investment analyst has rated the stock with a Buy rating and five have issued a Hold rating to the company's stock. According to MarketBeat.com, Strategic Education presently has a consensus rating of "Hold" and an average price target of $87.00.

Institutional Trading of Strategic Education

Several hedge funds have recently made changes to their positions in STRA. R Squared Ltd lifted its holdings in Strategic Education by 11.7% during the 3rd quarter. R Squared Ltd now owns 4,676 shares of the health services provider's stock worth $363,000 after purchasing an additional 490 shares in the last quarter. Fifth Third Bancorp grew its holdings in Strategic Education by 7.2% during the 3rd quarter. Fifth Third Bancorp now owns 13,946 shares of the health services provider's stock valued at $1,083,000 after buying an additional 932 shares in the last quarter. Maryland State Retirement & Pension System increased its position in shares of Strategic Education by 47.3% during the third quarter. Maryland State Retirement & Pension System now owns 4,833 shares of the health services provider's stock valued at $375,000 after buying an additional 1,553 shares during the period. Parallel Advisors LLC lifted its holdings in shares of Strategic Education by 2,597.1% in the third quarter. Parallel Advisors LLC now owns 2,778 shares of the health services provider's stock worth $216,000 after buying an additional 2,675 shares in the last quarter. Finally, Alps Advisors Inc. boosted its position in shares of Strategic Education by 12.8% in the third quarter. Alps Advisors Inc. now owns 7,014 shares of the health services provider's stock valued at $545,000 after acquiring an additional 798 shares during the period. 93.27% of the stock is currently owned by institutional investors.

Strategic Education Stock Down 10.4%

The business's 50-day moving average price is $79.60 and its 200 day moving average price is $80.19. The company has a market capitalization of $1.16 billion, a P/E ratio of 8.70, a price-to-earnings-growth ratio of 0.69 and a beta of 0.51.

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.

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