Bull of the Day: Stride (LRN)

Stride, a Zacks Rank #1 (Strong Buy), is a technology-based education service company that engages in the provision of proprietary and third-party online curriculum, software systems, and educational services in the United States and internationally. The stock is displaying relative strength, breaking out to the upside over the past month amid a bullish move that pushed shares to new all-time highs.The price movement is a sign of strength as we head deeper into the historically-positive fourth quarter. Increasing volume has attracted investor attention as buying pressure accumulates in this top-ranked stock.Stride is part of the Zacks Schools industry group, which currently ranks in the top 5% out of more than 250 industries. Because this group is ranked in the top half of all Zacks Ranked Industries, we expect it to outperform the market over the next 3 to 6 months.Also note the favorable metrics for this industry group below:Image Source: Zacks Investment ResearchHistorical research studies suggest that approximately half of a stock’s price appreciation is due to its industry grouping. In fact, the top 50% of Zacks Ranked Industries outperforms the bottom 50% by a factor of more than 2 to 1. It’s no secret that investing in stocks that are part of leading industry groups can give us a leg up relative to the market. By focusing on leading stocks within the top industries, we can dramatically improve our stock-picking success.Company DescriptionStride offers products and services that enable clients to attract, enroll, educate, and facilitate individualized learning for students. The company provides an integrated package of systems, services, and professional expertise to support a virtual or blended public school; software and services to schools and school districts; and individual online courses and supplemental educational products.With a focus on general education including subjects such as math, English, science, and history for K-12 students, Stride also offers post-secondary career learning programs including training for software engineering, health care, and medical fields to adult learners. The company serves public and private schools, charter boards, consumers, employers, and government agencies.Stride, which was formerly known as K12 Inc., was incorporated in 1999 and is headquartered in Reston, Virginia. It was named of the nation’s leading technology-based education companies by the 2024 BIG Awards for Business, highlighting the company’s commitment to delivering accessible, personalized, and career-centric virtual learning experiences.Earnings Trends and Future Estimates A premier education provider, Stride LRN has built up an impressive earnings history, surpassing earnings estimates in each of the past eight quarters. The company has delivered a trailing four-quarter average earnings beat of 100.8%.Back in October, Stride reported third-quarter earnings of 94 cents per share, a 370% surprise over the $0.20/share consensus estimate. Revenues of $551.1 million also exceeded projections by 10.2%.Analysts are bullish on the stock and have been raising earnings estimates across the board. The fourth-quarter consensus EPS estimate has been revised upward in the past 60 days by 19.4% to $1.97/share. If the company is able to achieve this, it would translate to a 27.9% growth rate versus the same quarter last year.Image Source: Zacks Investment ResearchLet’s Get TechnicalThis market leader has seen its stock advance more than 85% in 2024 alone. Only stocks that are in extremely powerful uptrends are able to experience this type of outperformance. This is the kind of stock we want to include in our portfolio – one that is trending well and receiving positive earnings estimate revisions.Image Source: StockChartsNotice how both the 50-day (blue line) and 200-day (red line) moving averages are sloping up. The stock has been making a series of higher highs throughout the year. With both strong fundamental and technical indicators, LRN stock is poised to continue its outperformance.Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. As we know, Stride has recently witnessed positive revisions. As long as this trend remains intact (and LRN continues to deliver earnings beats), the stock will likely continue its bullish run.Bottom LineBacked by a leading industry group and history of earnings beats, it’s not difficult to see why Stride stock is a compelling investment. Robust fundamentals combined with an appealing technical trend certainly justify adding shares to the mix.Recent positive earnings estimate revisions should also serve to create a ‘floor’ in terms of any sudden or unexpected downside moves. If you haven’t already done so, be sure to put LRN on your shortlist.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Stride, Inc. (LRN): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks