Stride, Inc. Faces Class Action Lawsuit Over Alleged Securities Fraud, Potential Losses in Millions
Written by Emily J. Thompson, Senior Investment Analyst
Source: PRnewswire
Updated: 3 day ago0mins
- Class Action Initiation: Levi & Korsinsky has filed a class action lawsuit against Stride, aiming to recover losses for investors affected between October 22, 2024, and October 28, 2025, highlighting significant investor concerns regarding the company's financial transparency.
- False Statements Uncovered: The complaint alleges that Stride inflated enrollment figures by retaining 'ghost students' and cut staffing costs by exceeding statutory teacher caseload limits, potentially exposing the company to substantial fines and reputational damage.
- Severe Compliance Issues: Stride is accused of ignoring compliance requirements, including failing to conduct employee background checks and neglecting federally mandated special education services, which not only compromises student education quality but may also trigger investigations and penalties from regulatory bodies.
- Investor Rights Protection: Affected investors have until January 12, 2026, to request lead plaintiff status, demonstrating the legal team's commitment to safeguarding investor rights while emphasizing that participation in the lawsuit incurs no costs, thereby lowering barriers for investor involvement.
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Analyst Views on LRN
Wall Street analysts forecast LRN stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for LRN is 115.50 USD with a low forecast of 82.00 USD and a high forecast of 130.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
5 Analyst Rating
3 Buy
2 Hold
0 Sell
Moderate Buy
Current: 63.410
Low
82.00
Averages
115.50
High
130.00
Current: 63.410
Low
82.00
Averages
115.50
High
130.00
BMO Capital
Market Perform
downgrade
$108 -> $82
2025-11-07
Reason
BMO Capital
Price Target
$108 -> $82
2025-11-07
downgrade
Market Perform
Reason
BMO Capital lowered the firm's price target on Stride to $82 from $108 and keeps a Market Perform rating on the shares. The stock sold off on disclosure of a botched platform integration, though the company has not received non-renewal notices from partners on this matter, crediting its goodwill with these organizations, and the management hopes for fixes over the next few months and is optimistic for the upcoming school year, the analyst tells investors in a research note.
Barrington
Outperform
to
NULL
downgrade
$185 -> $125
2025-10-29
Reason
Barrington
Price Target
$185 -> $125
2025-10-29
downgrade
Outperform
to
NULL
Reason
Barrington lowered the firm's price target on Stride to $125 from $185 and keeps an Outperform rating on the shares post the fiscal Q1 report. The company's initial fiscal 2026 outlook came in significantly below expectations, the analyst tells investors in a research note. "The damage has been done" but the shares should find support at current levels based on current estimates, adds Barrington. The firm points out that management believes the worst is behind Stride.
BMO Capital
Outperform -> Market Perform
downgrade
$108
2025-10-29
Reason
BMO Capital
Price Target
$108
2025-10-29
downgrade
Outperform -> Market Perform
Reason
BMO Capital downgraded Stride to Market Perform from Outperform with a $108 price target.
BMO Capital
Outperform -> Market Perform
downgrade
$164 -> $108
2025-10-29
Reason
BMO Capital
Price Target
$164 -> $108
2025-10-29
downgrade
Outperform -> Market Perform
Reason
BMO Capital downgraded Stride to Market Perform from Outperform with a price target of $108, down from $164. The firm cites the company's "disappointing" fiscal 2026 outlook for the downgrade. While Stride's fiscal Q2 results beat expectations, its first-time fiscal 2026 outlook was well below consensus estimates, with management citing a botched platform rollout leading to higher than expected student withdrawals, the analyst tells investors in a research note. BMO says the company is also limiting in-year enrollment growth to mitigate future issues. As fall enrollments are the key driver for Stride's fiscal year results, investors may have to wait until next fall for another catalyst. contends BMO.
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About LRN
Stride, Inc. is a technology company providing an educational platform to deliver online learning to students throughout the U.S. It provides a range of services including K-12 education, career learning, professional skills training, and talent development. Its platform hosts products and services to attract, enroll, educate, track progress, and support students. These products and services, spanning curriculum, systems, instruction, and support services, are designed to help learners of all ages reach their full potential through inspired teaching and personalized learning. Its platform addresses two markets in the K-12 space: General Education and Career Learning. Products and services for the General Education market are focused on core subjects for kindergarten through twelfth grade students to help build a common foundation of knowledge. Career Learning products and services are focused on developing skills to enter and succeed in careers in high-growth and in-demand industries.
About the author
Preview
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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What are the main allegations against Stride, Inc. in the lawsuit?
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How might the class action lawsuit affect Stride's future stock performance?
What could be the potential financial impact of legal liabilities on Stride?