Stride's Favorable Longer-Term Outlook Convinces Analyst To See 30% Upside From Current Levels

Barrington Research analyst Alexander Paris reiterated an Outperform rating on the shares of Stride Inc LRN with a price target of $50.
The analyst expects third-quarter revenues of $455.0 million, up 7.9% Y/Y; adjusted EBITDA of $98.9 million, up 9.5% Y/Y and GAAP EPS of $1.08, up 5.9% from $1.02 last year.
The analyst sees 2023 full-year revenue of $1.796 billion (+6.5% Y/Y) and adjusted EBITDA of $285.2 million (+4.4% Y/Y).
The company’s management expects FY23 revenue of $1.775 billion - $1.815 billion, and an adjusted operating income of $180-$200 million.
At current levels, the stock, which is up 21% YTD, is trading at 1.0x and 0.9x the analyst’s FY/23 and FY/24 revenue estimates and 6.2x and 5.7x the FY/23 and FY/24 adjusted EBITDA estimates.
The analyst said this represents a big discount to its Ed Tech peers, which trade at 3.1x/2.7x revenue and 21.6x/19.9x EBITDA.
The analyst noted Stride has favorable longer-term outlook, representing 30% upside from current levels.
The company will report the results of its fiscal third quarter on Tuesday, April 25, after the market close.
Price Action: LRN shares are trading lower by 0.62% at $38.35 on the last check Friday.

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