Stride, Inc. LRN recently reported first-quarter fiscal 2022 results (ended Sep 30, 2021), wherein both the earnings and revenues surpassed the Zacks Consensus Estimate. Revenues increased on a year-over-year basis, driven by improved revenue per enrollment, strong middle and high school Career Learning enrollments, and growth in Adult Learning.

Shares of the company rose 3% after it reported first-quarter fiscal 2022 results on Oct 20, 2021.

Earnings & Revenues Discussion

Adjusted loss of 15 cents per share surpassed the consensus mark of a loss of 18 cents. However, the figure decreased significantly from the year-ago earnings of 30 cents per share.

Revenues for the quarter totaled $400.2 million, surpassing the consensus mark of $367 million by 9%. Also, revenues increased 7.9% year over year, driven by higher revenue per enrollment, strong middle and high school Career Learning enrollments, and growth in Adult Learning.

Enrollment Details

General Education revenues for fiscal first quarter decreased 2.4% to $306.3 million. Enrollment of General Education dropped 10.3% year over year owing to the impacts of the coronavirus pandemic.

Nevertheless, Career Learning revenues for the reported quarter increased 64.4% to $93.9 million. Enrolment in Career Learning jumped 36.4% from the year-ago period.

Operating Highlights

Adjusted operating income came in at $4.5 million, down 80.3% from the year ago period.

During fiscal first-quarter 2022, the company reported adjusted EBITDA of $25.5 million compared with $39.2 million in the year ago quarter.

Liquidity & Cash Flow

As of Sep 30, 2021, Stride had cash and cash equivalents of $218.5 million compared with $386.1 million at fiscal 2021-end. During fiscal first-quarter 2022, cash used in operating activities totaled $131.5 million compared with $114.5 million in the year-ago period.

Fiscal Q2 Guidance

For second-quarter fiscal 2022, the company expects revenues in the range of $390-$400 million, up from $376.1 million reported during fiscal second-quarter 2021. Adjusted operating income is expected between $55 and $60 million compared with $50.1 million in the year-ago quarter.

Fiscal 2022 Outlook

For fiscal 2022, the company anticipates net revenues in the range of $1.56-$1.60 billion compared with $1.53 billion recorded in the prior-year quarter. The company also anticipates adjusted operating income in the range of $165-$180 million, up from $161.4 million reported in the year ago period. Capital expenditure for fiscal 2022 is expected to be in the range of $65 million to $75 million, up from $52.3 million during fiscal 2021.

Stride, a Zacks Rank #5 (Strong Sell) company, continues to witness strong Career Learning demand. Thus, it expects revenues and profitability growth across fiscal 2022.

Stride, Inc. Price, Consensus and EPS Surprise

Stride, Inc. price-consensus-eps-surprise-chart | Stride, Inc. Quote

3 Consumer Discretionary Stocks to Bet on

A few top-ranked stocks in the Zacks Consumer Discretionary sector include American Public Education, Inc. APEI, Laureate Education, Inc. LAUR and Lincoln Educational Services Corporation LINC. American Public sports a Zacks Rank #1 (Strong Buy), while Laureate Education and Lincoln Educational Services carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

American Public has a three- to five-year expected EPS growth rate of 15%.

Laureate Education’s earnings for 2021 are expected to rise 45.7%.

Lincoln Educational Services has a trailing four-quarter earnings surprise of 146%, on average.

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