What Happened?
Shares of online education Stride (NYSE: LRN) fell 50.8% in the afternoon session after the company's weak financial forecast overshadowed its third-quarter results. While Stride beat Wall Street's expectations for the third quarter, with revenue up 12.7% year-over-year to $620.9 million and adjusted earnings per share of $1.52 significantly ahead of estimates, investors focused on the company's grim outlook. Management's revenue guidance for the upcoming quarter came in 3.4% below analysts' projections. Furthermore, the full-year revenue forecast was also lowered, falling short of consensus estimates. This disappointing guidance suggested a slowdown ahead, which spooked the market and sent shares sharply lower.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Stride? Access our full analysis report here.
What Is The Market Telling Us
Stride’s shares are not very volatile and have only had 9 moves greater than 5% over the last year. Moves this big are rare for Stride and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 3 months ago when the stock gained 16.7% on the news that the company reported robust fourth-quarter and full-year 2025 financial results that significantly surpassed analyst expectations. For its fourth quarter, revenue climbed 22% to $653.6 million, beating forecasts, while adjusted earnings per share of $2.29 soared past the $1.76 analysts predicted. The strong quarter concluded a record fiscal year, with total revenue growing 18% to $2.4 billion. This growth stemmed from a sharp increase in enrollments, particularly in its Career Learning segment, which saw revenue jump 34.6%. Following the impressive report, Morgan Stanley raised its price target on the stock.
Stride is down 28.7% since the beginning of the year, and at $75.86 per share, it is trading 55.3% below its 52-week high of $169.81 from August 2025. Investors who bought $1,000 worth of Stride’s shares 5 years ago would now be looking at an investment worth $3,013.
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