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Strategic Education Inc. (STRA) Hit a 52 Week High, Can the Run Continue?
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Have you been paying attention to shares of Strategic Education (STRA - Free Report) ? Shares have been on the move with the stock up 16.3% over the past month. The stock hit a new 52-week high of $121.29 in the previous session. Strategic Education has gained 31.1% since the start of the year compared to the -3.8% move for the Zacks Consumer Discretionary sector and the 4.4% return for the Zacks Schools industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on April 25, 2024, Strategic Education reported EPS of $1.11 versus consensus estimate of $0.6 while it beat the consensus revenue estimate by 1.59%.
For the current fiscal year, Strategic Education is expected to post earnings of $4.75 per share on $1.19 billion in revenues. This represents a 27.69% change in EPS on a 5.04% change in revenues. For the next fiscal year, the company is expected to earn $5.63 per share on $1.25 billion in revenues. This represents a year-over-year change of 18.6% and 5.36%, respectively.
Valuation Metrics
Strategic Education may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Strategic Education has a Value Score of D. The stock's Growth and Momentum Scores are A and A, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 25.5X current fiscal year EPS estimates, which is a premium to the peer industry average of 17.3X. On a trailing cash flow basis, the stock currently trades at 20.1X versus its peer group's average of 10.1X. Additionally, the stock has a PEG ratio of 1.4. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Strategic Education currently has a Zacks Rank of #1 (Strong Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Strategic Education fits the bill. Thus, it seems as though Strategic Education shares could still be poised for more gains ahead.
How Does STRA Stack Up to the Competition?
Shares of STRA have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is American Public Education, Inc. (APEI - Free Report) . APEI has a Zacks Rank of # 2 (Buy) and a Value Score of B, a Growth Score of B, and a Momentum Score of F.
Earnings were strong last quarter. American Public Education, Inc. beat our consensus estimate by 357.14%, and for the current fiscal year, APEI is expected to post earnings of $0.62 per share on revenue of $613.84 million.
Shares of American Public Education, Inc. have gained 0.6% over the past month, and currently trade at a forward P/E of 22.9X and a P/CF of 2.49X.
The Schools industry is in the top 14% of all the industries we have in our universe, so it looks like there are some nice tailwinds for STRA and APEI, even beyond their own solid fundamental situation.
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Strategic Education Inc. (STRA) Hit a 52 Week High, Can the Run Continue?
Have you been paying attention to shares of Strategic Education (STRA - Free Report) ? Shares have been on the move with the stock up 16.3% over the past month. The stock hit a new 52-week high of $121.29 in the previous session. Strategic Education has gained 31.1% since the start of the year compared to the -3.8% move for the Zacks Consumer Discretionary sector and the 4.4% return for the Zacks Schools industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on April 25, 2024, Strategic Education reported EPS of $1.11 versus consensus estimate of $0.6 while it beat the consensus revenue estimate by 1.59%.
For the current fiscal year, Strategic Education is expected to post earnings of $4.75 per share on $1.19 billion in revenues. This represents a 27.69% change in EPS on a 5.04% change in revenues. For the next fiscal year, the company is expected to earn $5.63 per share on $1.25 billion in revenues. This represents a year-over-year change of 18.6% and 5.36%, respectively.
Valuation Metrics
Strategic Education may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Strategic Education has a Value Score of D. The stock's Growth and Momentum Scores are A and A, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 25.5X current fiscal year EPS estimates, which is a premium to the peer industry average of 17.3X. On a trailing cash flow basis, the stock currently trades at 20.1X versus its peer group's average of 10.1X. Additionally, the stock has a PEG ratio of 1.4. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Strategic Education currently has a Zacks Rank of #1 (Strong Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Strategic Education fits the bill. Thus, it seems as though Strategic Education shares could still be poised for more gains ahead.
How Does STRA Stack Up to the Competition?
Shares of STRA have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is American Public Education, Inc. (APEI - Free Report) . APEI has a Zacks Rank of # 2 (Buy) and a Value Score of B, a Growth Score of B, and a Momentum Score of F.
Earnings were strong last quarter. American Public Education, Inc. beat our consensus estimate by 357.14%, and for the current fiscal year, APEI is expected to post earnings of $0.62 per share on revenue of $613.84 million.
Shares of American Public Education, Inc. have gained 0.6% over the past month, and currently trade at a forward P/E of 22.9X and a P/CF of 2.49X.
The Schools industry is in the top 14% of all the industries we have in our universe, so it looks like there are some nice tailwinds for STRA and APEI, even beyond their own solid fundamental situation.