Strategic Education Faces Growth Challenges
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Mar 17 2026
0mins
Should l Buy STRA?
Source: Yahoo Finance
- Stagnant Domestic Student Growth: Strategic Education has failed to increase its domestic student count over the past two years, remaining at 85,306 in the latest quarter, indicating weak demand and potential market saturation, which may force the company to lower prices or invest in product improvements, thereby impacting near-term profitability.
- Declining EPS: The company's earnings per share (EPS) has decreased by 1.7% annually over the last five years, despite a 4.1% revenue growth, suggesting a decline in profitability on a per-share basis during expansion, which could undermine investor confidence.
- Disappointing Free Cash Flow Projections: Analysts expect Strategic Education's free cash flow margin to remain at 12.1% over the next year, reflecting pressure on the company's operating and capital expenditures, indicating that its financial health may not meet expectations.
- Reasonable Valuation but High Risk: Although the stock trades at a forward P/E of 11.5 (or $80.78 per share), the shaky fundamentals present too much downside risk, suggesting that investors should consider other more promising investment opportunities.
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Analyst Views on STRA
Wall Street analysts forecast STRA stock price to rise
3 Analyst Rating
3 Buy
0 Hold
0 Sell
Strong Buy
Current: 81.460
Low
85.00
Averages
95.00
High
105.00
Current: 81.460
Low
85.00
Averages
95.00
High
105.00
About STRA
Strategic Education, Inc. is an education services company. It provides access to education through campus-based and online post-secondary education offerings, as well as through programs to develop job-ready skills. It operates through its subsidiaries, Capella University and Strayer University, both accredited post-secondary institutions of higher education located in the United States, and Torrens University, an accredited post-secondary institution of higher education located in Australia. Its segments include U.S. Higher Education (USHE), Australia/New Zealand, and Education Technology Services. The USHE segment provides certificate and degree programs to working adults, primarily through Capella University and Strayer University. The Education Technology Services segment develops and maintains relationships with employers to build employee education benefits programs. The Australia/New Zealand segment includes Torrens University, Think Education, and Media Design School.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Executive Stock Transaction: Lizette Benedi Herraiz, General Counsel of Strategic Education, sold 2,982 shares of common stock in an open-market transaction on March 18, 2026, valued at approximately $238,200, reducing her direct holdings to 55,580 shares with a post-sale value of about $4.47 million, indicating a slight adjustment in her ownership stake.
- Equity Stake Change: This transaction accounted for 5.09% of Herraiz's direct common stock holdings, decreasing from 58,562 to 55,580 shares, reflecting stability in her long-term commitment to the company, as she retains no indirect or derivative ownership, showcasing her confidence in the company's future.
- Market Condition Influence: The sale price was closely aligned with the market close on March 18, 2026, suggesting that this transaction was likely a pre-scheduled, non-discretionary process, maintaining consistency in her trading pattern without significant reaction to market conditions.
- Company Financial Overview: Strategic Education experienced only a 4% revenue growth in 2025, while net income rose by 12% to $126.6 million; despite flat stock performance, a P/E ratio of 15 indicates reasonable valuation, and an annual dividend of $2.40 per share provides a strong incentive for shareholders to hold their positions.
See More
Strategic Education Executive Sells Shares Amid Moderate Gains
- Executive Share Sale: Strategic Education's General Counsel Lizette Benedi Herraiz sold 2,982 shares for approximately $238,000 on March 20, 2026, reducing her holdings from 58,562 to 55,580 shares, indicating that this sale aligns with her recent trading patterns.
- Transaction Plan Context: The sale was executed under a prearranged 10b5-1 trading plan established on December 12, 2025, suggesting that it was a scheduled transaction rather than an ad hoc decision, which mitigates concerns about the motivations behind the sale.
- Company Financial Performance: Strategic Education reported a 4% revenue increase in FY 2025, reaching $1.27 billion, with net income at $126.6 million, reflecting margin expansion driven by technology and AI productivity gains, despite softer enrollment trends in traditional higher education.
- Growth in Education Technology Services: Revenue from Education Technology Services surged over 28% in Q4, supported by strong adoption of Sophia Learning and employer partnerships, helping to offset declining trends in traditional higher education and demonstrating the company's competitive position in the education services market.
See More
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- Executive Share Sale: Lizette Benedi Herraiz, General Counsel of Strategic Education, sold 2,982 shares on March 18, 2026, for approximately $238,000, reducing her direct holdings by 5.09% to 55,580 shares, indicating a liquidity need among executives.
- Transaction Context: The sale was disclosed in SEC Form 4, executed at a price of $79.88 per share, reflecting a routine liquidity event rather than a signal on fundamentals, as it was conducted under a 10b5-1 plan.
- Company Financial Performance: Strategic Education reported a 4% revenue increase for fiscal year 2025, reaching $1.27 billion, with operating income climbing to $174.2 million and net income at $126.6 million, showcasing margin expansion driven by technology and AI productivity gains.
- Growth in Education Technology Services: The Education Technology Services segment saw revenue jump over 28% in Q4, supported by strong adoption of Sophia Learning and employer partnerships, offsetting softer enrollment trends in traditional higher education, highlighting the company's competitive edge in the education market.
See More
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- Program Offerings: The Master of Fine Arts (MFA) program focuses on screen scoring and music design, covering orchestral composition, electronic music production, and sound design, which is anticipated to attract students passionate about the music and entertainment industry, nurturing future creative talents.
- Industry Impact: The program will be led by Andy Hill, who brings over 20 years of music production experience in Hollywood, and his successful textbook, Scoring The Screen, will be integrated into the curriculum, aiming to equip students with practical skills aligned with industry realities to help them stand out in a competitive market.
- Global Expansion: Since its founding in Auckland, New Zealand in 1998, MDS has become a leader in creative industry education, and this expansion into the U.S. marks a significant evolution of its academic portfolio and global footprint, expected to attract more international students.
See More
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- Dream School Ranking: According to a recent survey by The Princeton Review, Harvard University has once again been named the most desirable college, attracting a large number of applicants despite facing lawsuits from the Trump administration and federal funding cuts, with acceptance rates dropping below 4%, indicating its strong brand influence.
- Tuition Pressure: The 2026 College Hopes and Worries survey revealed that over 9,400 students and parents consider tuition costs their biggest stressor, with some schools' annual costs nearing six figures, reflecting a staggering 914% increase in education costs since 1983, outpacing other household expenses.
- Surge in Student Loans: From 2005 to 2025, education debt surged by 343%, with 97% of graduates indicating that their debt has delayed major life goals, highlighting the increasing financial burden of higher education that forces students to borrow to cover tuition costs.
- Importance of Financial Aid: The Princeton Review noted that while many elite schools offer generous financial aid, Harvard does not provide merit-based scholarships, instead offering free tuition for undergraduates from families earning less than $200,000, underscoring the critical role of financial aid in school selection decisions.
See More
