Overview
Canaccord Genuity maintained a Buy rating on Stride Inc. (NYSE: LRN) and reaffirmed a $125.00 price target after the company published fiscal Q2 results. That price target represents approximately a 73% premium to the trading price of $72.43 at the time the analyst commentary was noted. According to InvestingPro data, analyst targets for the stock range from $75 to $125, with the consensus suggesting the shares trade below their Fair Value.
Quarterly results and operational context
Stride reported a fiscal Q2 in which total enrollment and revenue came in broadly consistent with expectations, while profitability exceeded the consensus. Growth was muted as the company intentionally limited enrollment while it worked through technology implementation challenges that emerged at the start of the school year. Management indicated that application volumes have remained healthy and were not materially affected by the technical issues, implying stable demand for the company’s virtual education offerings.
Stride also disclosed that it has resolved the core issues with its platform. The company said withdrawal rates and customer support requests declined over the quarter and returned to normal historical ranges by January. Management outlined plans to introduce an updated user experience over the coming months focused on student ease of use, with changes to be implemented gradually after appropriate testing.
Financial position and margins
Despite the operational headwinds from the platform upgrade, Stride has retained strong financial metrics. Revenue over the last twelve months reached $2.52 billion, and the company posted a gross profit margin of 39.3%. InvestingPro analysis highlighted a current ratio of 7.27, indicating substantial liquidity and a balance sheet that holds more cash than debt. That liquidity should provide Stride with the resources to fund ongoing platform improvements.
Management’s guidance for Q3 and fiscal 2026 was broadly in line with expectations, although the company warned that gross margin is expected to decline as it continues to invest in technology.
Market reaction and recent share performance
Shares of Stride had previously dropped sharply following disappointing fiscal Q1 results, when investors feared longer term impacts from the platform upgrade. Canaccord observed that the recovery trajectory appears to be progressing, quoting management as being "cautiously optimistic that the issue is in the past." Still, after the recently reported quarter that beat earnings estimates, the stock experienced a slight decline in after-hours trading.
Earnings highlights
Stride announced second-quarter results for fiscal year 2026 that topped analyst expectations. The company reported earnings per share of $2.50, representing a 24.38% increase versus the projected $2.01. Revenue came in at $631.3 million, slightly above the forecast of $627.9 million. These figures point to stronger near-term profitability even as growth remained constrained by the deliberate enrollment limits and the earlier technology rollover issues.
Analyst context
Canaccord’s maintained Buy stance and $125.00 target sit at the high end of the InvestingPro analyst range of $75 to $125. The divergence between the current market price of $72.43 and the $125.00 target underscores the analyst view that the shares may be materially undervalued relative to Fair Value.
Conclusion
Stride’s fiscal Q2 combined in-line enrollment and revenue with better-than-expected profitability, while management reports platform metrics normalizing after earlier issues. The company’s sizable liquidity position and ongoing technology investments are central to guidance that foresees margin pressure ahead. Canaccord Genuity’s reiteration of a Buy rating and a $125.00 target reflects confidence that the operational problems are being resolved, though the market reaction has been mixed in the immediate term.
Key sectors impacted: Education technology, broader technology services supporting virtual learning, and equity markets covering growth and software-driven education providers.