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what it is
Strategic Education sells college degrees and workforce education, mostly online, to working adults who need flexibility more than campus lawns.
how it gets paid
Last year Strategic Educat made $1.3B in revenue. U.S. Higher Education was the main engine at $0.91B, or 70% of sales.
why it's growing
Revenue grew 4.0% last year. The former group reported strong sales growth thanks to continued robust demand for sophia learning.
what just happened
Third-quarter revenue hit $320M, up 2% vs. prior year, and results came in better than expected.
At a glance
B+ balance sheet — decent shape, but not bulletproof
45/100 earnings predictability — expect surprises
13.8x trailing p/e — the market's not buying it — or you found a deal
3.0% dividend yield — cash in your pocket every quarter
9.5% return on capital — nothing to write home about
xvary composite: 62/100 — average
What they do
Strategic Education sells college degrees and workforce education, mostly online, to working adults who need flexibility more than campus lawns.
If you are working full time, a degree that fits around your job matters more than college brochures. STRA gets that demand through Strayer and Capella, and U.S. Higher Education still produced 70% of 2024 revenue. Switching costs -> the pain of transferring credits and restarting classes -> so what: once your time, credits, and employer tuition benefits are tied in, leaving is annoying and expensive.
How they make money
$1.3B
annual revenue · their business grew +4.0% last year
U.S. Higher Education
$0.91B
Australia/New Zealand
$0.27B
Educational Technology
$0.12B
The products that matter
degree and certificate programs
U.S. Higher Education
core revenue engine
this sits inside a company doing $1.3B in annual revenue, and recent results showed gains in the U.S. higher education segment. the problem is disclosure: you are not getting a clean dollar breakout here.
core
low-cost online general education
Sophia Learning
recent growth driver
management called out strong demand for sophia learning in the latest update. in a business that grew 4.0% last year, that matters because cheaper online formats can support volume even when traditional enrollment gets harder.
digital growth
employer tuition partnerships
Workforce Edge
partnership-led channel
a rise in workforce edge employer partnerships was one of the few concrete positives in the recent news flow. on a $1.3B revenue base, new employer relationships matter because they can lower customer acquisition friction.
watch this
Key numbers
13.8x
trailing p/e
P/E -> price compared with annual profit -> so what: you are paying $13.80 for each $1 of trailing earnings for a company with a 3.0% dividend yield.
21.0%
operating margin
Operating margin -> profit after running the business -> so what: STRA keeps about $0.21 from each $1 of revenue before interest and taxes.
9.5%
return on capital
Return on capital -> profit generated from money invested in the business -> so what: this is decent, but not the kind of number that excuses any price.
3.0%
dividend yield
Dividend yield -> cash paid to you each year relative to the stock price -> so what: you get paid while waiting for modest 3.5% projected earnings growth.
Financial health
B+
strength
- balance sheet grade B+ — solid but not elite
- risk rank 3 — safer than 50% of stocks
- price stability 50 / 100
- net profit margin 12.4% — keeps 12 cents of every dollar in revenue
- return on equity 10% — $0.10 profit for every $1 investors have put in
B+ — functional but not a standout on the balance sheet.
Total return vs. market
You invested $10,000 in STRA 3 years ago → it's now worth $10,840.
The index would have given you $13,920.
source: institutional data · total return
What just happened
beat estimates
Third-quarter revenue hit $320M, up 2% vs. prior year, and results came in better than expected.
The gain was driven by both Educational Technology Services and U.S. Higher Education. EPS also kept climbing, with 2025 quarterly EPS rising from $1.30 in Q1 to $1.63 in Q3 before a $1.40 Q4 finish.
$320M
revenue
$1.63
eps
2.0%
revenue growth
the number that mattered
$320M matters because this is a low-growth story, so even 2% revenue growth with a beat tells you enrollment and pricing did not crack.
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strategic education posted better-than-anticipated 2025 third-quarter results.
-
revenues of $320 million were modestly higher than our estimate and increased 2% compared to the previous-year tally.
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the advance was driven by gains at both the education technology services (ets) and u.s.
-
higher education (ushe) segments.the former group reported strong sales growth thanks to continued robust demand for sophia learning, which offers low-cost online general education courses.
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a rise in workforce edge employer partnerships also provided a boost.
source: company earnings report, 2025
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What could go wrong
the top threat is enrollment softness across online and degree programs.
med
fewer students means the cheap-multiple case breaks fast
the company generated $1.3B in annual revenue from education offerings. if enrollment slips, there is no giant side business here to hide the damage.
with revenue growth only 4.0% last year, even a modest slowdown would matter.
med
student-aid and education-policy changes can hit demand and margins
education businesses live closer to regulation than most service companies. changes to funding, oversight, or operating rules can raise costs and make recruiting students harder.
that pressure lands on a business currently earning an 11.7% net margin — healthy, but not wide enough to ignore policy risk.
med
pricing pressure from traditional schools and online alternatives
there is no monopoly here. traditional universities, online programs, and lower-cost course platforms all compete for the same student wallet.
the latest quarterly margin was 10.0%. if pricing gets more promotional, that number has room to move the wrong way.
these risks do not threaten a side segment. they threaten the core $1.3B revenue stream and the margin holding above the recent 10.0% quarterly level.
source: institutional data · regulatory filings · risk analysis
Pay attention to
risk
quarterly enrollment momentum
this is the whole story. if revenue starts slipping below the recent $320M quarterly level, the market will assume enrollment is softening before management says it outright.
calendar
next earnings release
you want to see whether EPS can build on the move from $4.87 to $5.85 rather than give it back.
trend
sophia learning demand
management already flagged sophia as a bright spot. if that digital channel keeps gaining traction, it can offset slower traditional program growth.
metric
institutional selling pressure
112 buyers versus 138 sellers is not a collapse, but another weak quarter of ownership flow would tell you the market still does not trust the rebound.
Analyst rankings
short-term outlook
top 20%
momentum score 2 — analysts expect above-average price performance in the year ahead. in human-speak, they think the setup is better than the stock's reputation.
risk profile
average
stability score 3 — this is not a bunker stock, but it is not a chaos stock either.
chart momentum
average
technical score 3 — the chart is behaving normally. there is no dramatic signal hiding here.
earnings predictability
45 / 100
earnings are harder to model here than in steadier businesses. if you own it, leave room for uneven quarters.
source: institutional data
Institutional activity
institutions have been net selling for 2 consecutive quarters — 112 buyers vs. 138 sellers in 3q2025. total institutional holdings: 22.3M shares. net selling for 2 quarters.
source: institutional data
Price targets
3-5 year target range
$63
$142
$81
current price
$103
target midpoint · +27% from current · 3-5yr high: $190 (+135% · 25% ann'l return)
Want the deeper analysis?
The full deep dive: dcf model, scenario analysis, competitive moat breakdown, and quarterly tracking — everything on this page, taken further.
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