E-Learning Stock in Focus as Delta Variant Picks Up

Stride reports earnings next Tuesday, Aug. 10

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Stride, Inc. (NYSE:LRN) is a for-profit educational company that facilitates online learning. The  programs are designed as an alternative to traditional education for public school students, as well as career learning programs designed to prepare learners of all ages with competitive skills. As the delta variant rampages across the globe, socially distant learnings measures put stocks such as LRN back in focus ahead of the school year. 

Stride stock is up 42.5% in 2021, despite a 25.7% year-over-year deficit. The $34 level has served as a short-term ceiling, denying breakout attempts since April. While the shares are comfortably above their Dec. 29 annual low of $20.39, they're also a far cry from their record high of $52.84, netted a year ago today in 2020. 

Stride will step into the earnings confessional next Tuesday, Aug. 10, after the market closes. The stock has an ugly post-earnings history, with negative reactions after seven of its last eight quarterly reports. This time around, the options market is pricing in a 12.3% post-earnings move, regardless of direction, for Wednesday's trading. 

From a fundamental perspective, Stride stock continues to demonstrate promising growth despite experiencing a 34% decrease in net income for fiscal 2020. LRN has managed to recover nicely on the bottom-line, growing its trailing 12-month net income by 169% compared to what was reported for fiscal 2020. Stride has also increased revenues by 53% since fiscal 2018. In addition, Stride stock has an intriguing valuation with a price-earnings ratio of 19.12, which is a fair value given LRN’s growth on the bottom-line.

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