Strategic Education (NASDAQ:STRA – Get Free Report) posted its quarterly earnings results on Wednesday. The health services provider reported $1.76 earnings per share (EPS) for the quarter, missing the consensus estimate of $1.80 by ($0.04), FiscalAI reports. The company had revenue of $321.60 million during the quarter, compared to analyst estimates of $327.55 million. Strategic Education had a net margin of 10.21% and a return on equity of 8.78%. The company’s revenue was up 4.9% on a year-over-year basis. During the same period in the prior year, the company earned $1.54 earnings per share.
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 Stock Performance
Shares of STRA traded down $1.63 during mid-day trading on Thursday, reaching $85.99. 86,892 shares of the company’s stock traded hands, compared to its average volume of 283,611. The business’s 50-day moving average price is $78.81 and its 200-day moving average price is $80.15. The stock has a market capitalization of $1.94 billion, a P/E ratio of 15.27, a price-to-earnings-growth ratio of 0.75 and a beta of 0.50. Strategic Education has a 12 month low of $69.70 and a 12 month high of $89.73.
Strategic Education Announces Dividend
Wall Street Analysts Forecast Growth
A number of equities analysts recently commented on the company. Barrington Research set a $105.00 price target on Strategic Education in a research note on Wednesday. Truist Financial cut their price objective on Strategic Education from $85.00 to $80.00 and set a “hold” rating on the stock in a research note on Monday, April 27th. Weiss Ratings reaffirmed a “hold (c)” rating on shares of Strategic Education in a report on Friday, July 17th. Wall Street Zen downgraded Strategic Education from a “buy” rating to a “hold” rating in a report on Wednesday, June 24th. Finally, BMO Capital Markets lifted their target price on Strategic Education from $86.00 to $91.00 and gave the stock an “outperform” rating in a research report on Monday, July 6th. Two investment analysts have rated the stock with a Buy rating and three have assigned a Hold rating to the stock. According to MarketBeat.com, Strategic Education has an average rating of “Hold” and an average target price of $92.00.
Read Our Latest Stock Analysis on Strategic Education
Key Headlines Impacting Strategic Education
Here are the key news stories impacting Strategic Education this week:
- Positive Sentiment: Strategic Education reported second-quarter revenue of $337.3 million, up 4.9% year over year and ahead of analysts’ expectations. Growth was supported by the Education Technology Services segment, higher U.S. higher-education revenue per student, and favorable foreign-exchange effects. Strategic Education Reports Second Quarter 2026 Results
- Positive Sentiment: The company declared a quarterly dividend of $0.60 per share, equivalent to $2.40 annually and a roughly 2.7% yield. The announcement helped push STRA to a new 12-month high, signaling continued shareholder-return support. Strategic Education Sets New 12-Month High After Dividend Announcement
- Neutral Sentiment: Management’s second-quarter earnings call and presentation provided additional operating context for investors, with attention likely focused on enrollment trends, segment performance, and the outlook for the remainder of 2026. Strategic Education Q2 2026 Earnings Call Summary
- Negative Sentiment: Adjusted earnings were $1.76 per share, below the consensus estimate of approximately $1.79-$1.80, although earnings increased from $1.54-$1.52 per share a year earlier. The miss may limit upside if investors focus on profitability rather than revenue growth. Strategic Education Q2 Earnings Lag Estimates
Insider Buying and Selling
In other Strategic Education news, insider Christa Hokenson sold 2,000 shares of the business’s stock in a transaction on Thursday, June 4th. The stock was sold at an average price of $80.00, for a total transaction of $160,000.00. Following the completion of the transaction, the insider owned 65,195 shares in the company, valued at approximately $5,215,600. The trade was a 2.98% decrease in their position. The sale was disclosed in a legal filing with the SEC, which can be accessed through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. 3.60% of the stock is currently owned by corporate insiders.
Institutional Investors Weigh In On Strategic Education
Hedge funds and other institutional investors have recently modified their holdings of the stock. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. grew its position in Strategic Education by 3.1% in the 1st quarter. MIRAE ASSET GLOBAL ETFS HOLDINGS Ltd. now owns 16,195 shares of the health services provider’s stock valued at $1,360,000 after buying an additional 487 shares in the last quarter. Jane Street Group LLC boosted its holdings in shares of Strategic Education by 40.2% in the first quarter. Jane Street Group LLC now owns 43,433 shares of the health services provider’s stock valued at $3,647,000 after acquiring an additional 12,444 shares in the last quarter. EverSource Wealth Advisors LLC boosted its holdings in shares of Strategic Education by 192.7% in the second quarter. EverSource Wealth Advisors LLC now owns 1,162 shares of the health services provider’s stock valued at $99,000 after acquiring an additional 765 shares in the last quarter. First Trust Advisors LP increased its stake in shares of Strategic Education by 20.0% during the second quarter. First Trust Advisors LP now owns 24,657 shares of the health services provider’s stock valued at $2,099,000 after acquiring an additional 4,118 shares during the period. Finally, Jump Financial LLC bought a new stake in Strategic Education during the second quarter worth approximately $246,000. 93.27% of the stock is currently owned by institutional investors.
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.
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