Strategic Education (NASDAQ:STRA) Stock Price Down 9.9% After Earnings Miss

Strategic Education Inc. (NASDAQ:STRA)’s stock price fell 9.9% on Friday after the company announced weaker than expected quarterly earnings. The stock traded as low as $53.91 and last traded at $52.6910. 31,021 shares traded hands during mid-day trading, a decline of 89% from the average session volume of 287,112 shares. The stock had previously closed at $58.47.

The health services provider reported $1.72 EPS for the quarter, missing analysts’ consensus estimates of $1.95 by ($0.23). The firm had revenue of $325.07 million for the quarter, compared to analysts’ expectations of $326.55 million. Strategic Education had a net margin of 10.46% and a return on equity of 8.98%. The firm’s revenue for the quarter was up 1.6% on a year-over-year basis. During the same quarter last year, the firm earned $1.64 earnings per share.

Strategic Education Dividend Announcement

The firm also recently disclosed a quarterly dividend, which will be paid on Monday, December 7th. Investors of record on Monday, November 30th will be paid a dividend of $0.60 per share. The ex-dividend date of this dividend is Monday, November 30th. This represents a $2.40 annualized dividend and a yield of 4.6%. Strategic Education’s dividend payout ratio (DPR) is currently 40.00%.

Key Strategic Education News

Here are the key news stories impacting Strategic Education this week:

• Positive Sentiment: The company declared a quarterly dividend of $0.60 per share, payable December 7 to shareholders of record November 30. The annualized payout is $2.40 per share. Dividend announcement
• Neutral Sentiment: Third-quarter revenue rose 1.6% year over year to $325.1 million, roughly in line with estimates. EPS increased from $1.64 a year earlier to $1.72, but still fell short of analysts’ expectations. Third-quarter results
• Negative Sentiment: The key concern is the earnings miss: EPS of $1.72 was below consensus estimates of about $1.92–$1.95. Coverage also cited a roughly $134 million Torrens writedown as a significant factor behind the weak results, weighing on sentiment despite modest revenue growth. Torrens writedown coverage
• Negative Sentiment: Ademi LLP said it is investigating potential securities-fraud claims against Strategic Education. The announcement is an investigation, not a finding of wrongdoing, but adds a legal overhang following the stock’s sharp decline. Shareholder investigation notice

Analyst Ratings Changes

A number of equities analysts have weighed in on STRA shares. William Blair lowered Strategic Education to a “market perform” rating in a research note on Friday. Wall Street Zen raised Strategic Education from a “hold” rating to a “buy” rating in a report on Saturday, August 1st. BMO Capital Markets downgraded Strategic Education from an “outperform” rating to a “market perform” rating and dropped their price target for the company from $95.00 to $66.00 in a research report on Friday. Barrington Research set a $105.00 price objective on Strategic Education in a report on Wednesday, July 29th. Finally, Weiss Ratings cut shares of Strategic Education from a “hold (c+)” rating to a “hold (c)” rating in a research report on Wednesday, October 28th. One investment analyst has rated the stock with a Buy rating and five have issued a Hold rating to the company. Based on data from MarketBeat, the stock has an average rating of “Hold” and a consensus target price of $87.00.

Institutional Inflows and Outflows

Several hedge funds and other institutional investors have recently added to or reduced their stakes in the stock. R Squared Ltd increased its stake in Strategic Education by 11.7% in the third quarter. R Squared Ltd now owns 4,676 shares of the health services provider’s stock valued at $363,000 after acquiring an additional 490 shares during the last quarter. Fifth Third Bancorp lifted its stake in Strategic Education by 7.2% during the third quarter. Fifth Third Bancorp now owns 13,946 shares of the health services provider’s stock worth $1,083,000 after purchasing an additional 932 shares during the last quarter. Maryland State Retirement & Pension System lifted its stake in Strategic Education by 47.3% during the third quarter. Maryland State Retirement & Pension System now owns 4,833 shares of the health services provider’s stock worth $375,000 after purchasing an additional 1,553 shares during the last quarter. Parallel Advisors LLC lifted its stake in Strategic Education by 2,597.1% during the third quarter. Parallel Advisors LLC now owns 2,778 shares of the health services provider’s stock worth $216,000 after purchasing an additional 2,675 shares during the last quarter. Finally, Alps Advisors Inc. boosted its holdings in shares of Strategic Education by 12.8% in the 3rd quarter. Alps Advisors Inc. now owns 7,014 shares of the health services provider’s stock worth $545,000 after purchasing an additional 798 shares in the last quarter. 93.27% of the stock is currently owned by hedge funds and other institutional investors.

Strategic Education Trading Down 10.4%

The business has a fifty day moving average price of $79.60 and a 200-day moving average price of $80.19. The stock has a market capitalization of $1.16 billion, a PE ratio of 8.70, a PEG ratio of 0.69 and a beta of 0.51.

About Strategic Education

Strategic Education, Inc (NASDAQ: STRA) is an education services company that provides postsecondary programs through Strayer University and Capella University. Its institutions serve working adults and other nontraditional students through online and campus-based learning options.

Strayer University offers undergraduate and graduate degree programs, professional certificates and other career-focused educational programs in areas such as business, information technology, health services and criminal justice.