Analysts have slightly increased their price target for Strategic Education, raising it to $94 from $88. They cite stronger growth at Capella, expected benefits from technology efficiencies, and a positive outlook on regulatory developments.
Analyst Commentary
Bullish analysts point to several factors driving their upward adjustment of Strategic Education's price target and positive outlook on the company's prospects.
Bullish Takeaways- Capella University's growth has recently outpaced that of Strayer, attributed to greater investment focus and stronger momentum in employer enrollments.
- The company's technology initiatives, including the integration of artificial intelligence, are expected to enhance operational efficiency and support profitability.
- Regulatory changes, particularly stemming from the One Big Beautiful Bill, are anticipated to be neutral or even beneficial to Strategic Education's business model.
- The group is aiming to return to low-to-mid-20% operating margins. This signals confidence in execution and a focus on restoring historical profitability levels.
- Strayer University continues to lag Capella in growth, raising questions about the pace of improvement at one of the company's key brands.
- Reliance on regulatory tailwinds leaves some uncertainty, as any adverse policy shifts could impact the favorable scenario analysts currently anticipate.
- Execution of technology and cost initiatives remains a key risk. The expected efficiencies must be realized to achieve targeted margin expansion.
What's in the News
- The Supreme Court has allowed the Education Department to proceed with mass layoffs. This move could impact Strategic Education and other sector peers (The Wall Street Journal).
- Between April 1 and June 30, 2025, Strategic Education repurchased 325,844 shares, totaling $28.01 million. This completed more than half of its ongoing buyback program.
Valuation Changes
- Fair Value Estimate has risen slightly from $102.67 to $103.33.
- Discount Rate increased from 6.75% to 7.13%.
- Revenue Growth projection fell from 4.36% to 3.68%.
- Net Profit Margin improved marginally from 13.86% to 13.90%.
- Future P/E Ratio decreased from 14.15x to 13.86x.
Have other thoughts on Strategic Education?
Create your own narrative on this stock, and estimate its Fair Value using our Valuator tool.
Create NarrativeDisclaimer
AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.