Strategic Education, Inc. Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

It's been a pretty great week for Strategic Education, Inc. (NASDAQ:STRA) shareholders, with its shares surging 14% to US$109 in the week since its latest yearly results. It looks like a credible result overall - although revenues of US$1.1b were in line with what the analysts predicted, Strategic Education surprised by delivering a statutory profit of US$2.91 per share, a notable 14% above expectations. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Strategic Education

Taking into account the latest results, the most recent consensus for Strategic Education from three analysts is for revenues of US$1.19b in 2024. If met, it would imply a modest 5.3% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to bounce 50% to US$4.33. In the lead-up to this report, the analysts had been modelling revenues of US$1.19b and earnings per share (EPS) of US$4.35 in 2024. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

With the analysts reconfirming their revenue and earnings forecasts, it's surprising to see that the price target rose 16% to US$116. It looks as though they previously had some doubts over whether the business would live up to their expectations. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Strategic Education at US$125 per share, while the most bearish prices it at US$104. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 5.3% growth on an annualised basis. That is in line with its 5.8% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 12% per year. So although Strategic Education is expected to maintain its revenue growth rate, it's forecast to grow slower than the wider industry.

The Bottom Line

The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.

With that in mind, we wouldn't be too quick to come to a conclusion on Strategic Education. Long-term earnings power is much more important than next year's profits. We have forecasts for Strategic Education going out to 2025, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 1 warning sign for Strategic Education that you should be aware of.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.