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Here's Why You Should Buy Strategic Education (STRA) Stock
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Strategic Education, Inc. or SEI (STRA - Free Report) is likely to benefit from strong demand environment, improved enrollment trends and strong revenue per student. Also, focus on digital learning platforms, competency-based learning model and direct assessment capabilities bode well.
Shares of STRA have increased 4.1% in the past year compared with the Zacks Schools industry’s rise of 22.5%.
Nonetheless, earnings estimates for 2023 have increased 1.3% in the past 30 days. This depicts analysts' optimism over the company’s growth prospects.
Image Source: Zacks Investment Research
Let’s discuss the factors substantiating its Zacks Rank #1 (Strong Buy).
Growth Drivers
During second-quarter, 2023, SEI's revenue increased 5.2% year over year to $287.7 million. The upside was backed by strong contribution from U.S. Higher Education segment, significant revenue growth within Education Technology Services segment and strong revenue per student in Australia and New Zealand segment.
The U.S. Higher Education segment (USHE) continues to witness growth. During the second-quarter 2023, the segment's revenues increased 6.7% year over year to $202.7 million (approximately 70.5% of total revenue). The upside was driven by strong demand environment and consistent year-over-year growth in university inquiries. Notably, Strayer and Capella Universities reported strong new student enrollment. Capella continuously invests in introducing new programs and specializations to improve student outcomes. Continuous innovation and course updates expand its product portfolio, which in turn boost enrollments and drive long-term growth.
The company is focusing on providing programs based on a “competency-based learning model and direct assessment capabilities”. One of these innovations is FlexPath. FlexPath continues to be one of the company’s fastest growing programs as it allows students to focus on leveraging their skills and knowledge gained during professional hours. In second-quarter 2023, FlexPath enrollments represented 21% of all USHE enrollments, up from 19% reported in the prior-year period.
The Zacks Consensus Estimate for RCL’s 2023 sales and EPS implies gains of 54.5% and 180.3%, respectively, from the year-ago period’s levels.
Trip.com Group Limited (TCOM - Free Report) flaunts a Zacks Rank #2 (Buy). It has a trailing four-quarter earnings surprise of 147.9%, on average. The stock has increased 51.5% in the past year.
The Zacks Consensus Estimate for Trip.com Group’s 2023 sales and EPS suggests increases of 104.9% and 537.9%, respectively, from the year-ago period’s levels.
OneSpaWorld Holdings Limited (OSW - Free Report) carries a Zacks Rank #2. It has a trailing four-quarter earnings surprise of 42.6%, on average. The stock has increased 22.7% in the past year.
The Zacks Consensus Estimate for OSW’s 2023 sales and EPS indicates rises of 44.5% and 107.1%, respectively, from the year-ago period’s levels.
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Here's Why You Should Buy Strategic Education (STRA) Stock
Strategic Education, Inc. or SEI (STRA - Free Report) is likely to benefit from strong demand environment, improved enrollment trends and strong revenue per student. Also, focus on digital learning platforms, competency-based learning model and direct assessment capabilities bode well.
Shares of STRA have increased 4.1% in the past year compared with the Zacks Schools industry’s rise of 22.5%.
Nonetheless, earnings estimates for 2023 have increased 1.3% in the past 30 days. This depicts analysts' optimism over the company’s growth prospects.
Image Source: Zacks Investment Research
Let’s discuss the factors substantiating its Zacks Rank #1 (Strong Buy).
Growth Drivers
During second-quarter, 2023, SEI's revenue increased 5.2% year over year to $287.7 million. The upside was backed by strong contribution from U.S. Higher Education segment, significant revenue growth within Education Technology Services segment and strong revenue per student in Australia and New Zealand segment.
The U.S. Higher Education segment (USHE) continues to witness growth. During the second-quarter 2023, the segment's revenues increased 6.7% year over year to $202.7 million (approximately 70.5% of total revenue). The upside was driven by strong demand environment and consistent year-over-year growth in university inquiries. Notably, Strayer and Capella Universities reported strong new student enrollment. Capella continuously invests in introducing new programs and specializations to improve student outcomes. Continuous innovation and course updates expand its product portfolio, which in turn boost enrollments and drive long-term growth.
The company is focusing on providing programs based on a “competency-based learning model and direct assessment capabilities”. One of these innovations is FlexPath. FlexPath continues to be one of the company’s fastest growing programs as it allows students to focus on leveraging their skills and knowledge gained during professional hours. In second-quarter 2023, FlexPath enrollments represented 21% of all USHE enrollments, up from 19% reported in the prior-year period.
Other Key Picks
Other top-ranked stocks from the Zacks Consumer Discretionary sector are:
Royal Caribbean Cruises Ltd. (RCL - Free Report) sports a Zacks Rank #1. It has a trailing four-quarter earnings surprise of 28.5%, on average. The stock has surged 140.6% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for RCL’s 2023 sales and EPS implies gains of 54.5% and 180.3%, respectively, from the year-ago period’s levels.
Trip.com Group Limited (TCOM - Free Report) flaunts a Zacks Rank #2 (Buy). It has a trailing four-quarter earnings surprise of 147.9%, on average. The stock has increased 51.5% in the past year.
The Zacks Consensus Estimate for Trip.com Group’s 2023 sales and EPS suggests increases of 104.9% and 537.9%, respectively, from the year-ago period’s levels.
OneSpaWorld Holdings Limited (OSW - Free Report) carries a Zacks Rank #2. It has a trailing four-quarter earnings surprise of 42.6%, on average. The stock has increased 22.7% in the past year.
The Zacks Consensus Estimate for OSW’s 2023 sales and EPS indicates rises of 44.5% and 107.1%, respectively, from the year-ago period’s levels.