How PowerSchool's Latest AI Solutions Could Drive Stock Higher

PowerSchool Holdings, Inc. PWSC, a leader in cloud-based software for K-12 education, has announced two new AI-driven tools, PowerBuddy for College and Career and PowerBuddy for Custom AI. These tools aim to revolutionize the way students, families, and school districts access and manage information, potentially driving further growth for PWSC stock.

PWSC's AI Tools to Transform College and Career Planning

PowerBuddy for College and Career helps students take control of their future planning by offering personalized guidance based on their unique needs. This AI assistant uses longitudinal student data to provide real-time responses about career paths, college options, scholarships, and more. With natural language interactions, students can easily access relevant information without wasting time sifting through resources.

The assistant is designed to reduce the burden on school counselors, who often manage far more students than recommended. By offering a self-service platform for students to explore postsecondary options, PowerBuddy allows counselors to focus on higher-impact areas of support.

PWSC's AI Tools to Enhance School District Efficiency

PowerBuddy for Custom AI is designed to streamline how school districts interact with their communities. By providing real-time answers to district-specific queries — ranging from policy manuals to athletic schedules — this tool saves both time and effort for families and staff. The AI assistant ensures users receive approved, accurate information from the district's knowledge base, reducing the need for manual searches.

Given that only 23% of educators feel partnerships with parents have strengthened since the pandemic, PowerBuddy's ability to improve communication and accessibility could significantly impact school district adoption of PowerSchool's software, boosting the company's growth trajectory and stock appeal.

Both PowerBuddy tools are built on PowerSchool's Responsible AI principles, with a strong focus on privacy and security. The company's commitment to secure, efficient, and personalized technology could strengthen PowerSchool's foothold in the education technology space.

As districts and schools seek more efficient ways to manage operations and student support, these AI-driven innovations could drive higher adoption rates of PowerSchool's offerings, positively impacting PWSC stock.

PWSC Stock Performance

Shares of this cloud-based education software provider have gained 8.5% in the past six months against the Zacks Schools industry's 9.1% decline. The company has been benefiting from the continuous strength in the market demand for its suite of mission-critical products, along with its focus on operating leverage. Furthermore, its advanced AI solutions enhancements and opportunities in its market bode well for PWSC's prospects.

Image Source: Zacks Investment Research

Considering the estimate revision trend, the Zacks Consensus Estimate for 2024 and third-quarter earnings per share of PWSC have trended upward to 90 cents (from 63 cents) and 25 cents (from 18 cents) over the past 60 days, respectively. The estimated figures indicate 9.8% and 4.2% growth, respectively, from the year-ago period's reported levels. Such an uptrend depicts analysts' optimism about the stock's potential.

In June 2024, PowerSchool entered into a definitive agreement to be acquired by one of the world's leading private multi-asset alternative investment firms, Bain Capital. The transaction, valued at $5.6 billion, is expected to close in the second half of 2024, subject to customary closing conditions, including regulatory approvals. Although PWSC is set to be acquired, it will continue to remain a standalone company with no interruptions in its business operations and customer service.

PWSC Zacks Rank

PowerSchool currently carries a Zacks Rank #3 (Hold).

Key Picks

Here are some better-ranked stocks from the Zacks Consumer Discretionary sector:

Stride, Inc. LRN presently carries a Zacks Rank of 2 (Buy). LRN has a trailing four-quarter earnings surprise of 40.3%, on average.

LRN shares have gained 31.8% in the past six months. The consensus estimate for LRN's fiscal 2025 sales and EPS implies a rise of 6.3% and 7.7%, respectively, from the year-ago levels.

Grand Canyon Education, Inc. LOPE, currently carrying a Zacks Rank #2, has a trailing four-quarter earnings surprise of 10.2%, on average.

LOPE shares have gained 6.5% in the past six months. LOPE has seen an upward estimate revision for 2024 earnings to $7.98 per share from $7.80 over the past 60 days. This company's earnings for 2024 are expected to register 13.4% growth from a year ago.

Lincoln Educational Services Corporation LINC, currently carrying a Zacks Rank #2, has a trailing four-quarter earnings surprise of 249.4%, on average.

LRN shares have gained 24.5% in the past six months. LINC has seen an upward estimate revision for 2024 earnings to 51 cents per share from 48 cents over the past 60 days. This company's earnings for 2024 are expected to register 4.1% growth from a year ago.

To read this article on Zacks.com click here.