Strategic Education (NasdaqGS:STRA) - Share price, News & Analysis

STRA fundamental analysis
Snowflake Score
Valuation	3/6
Future Growth	3/6
Past Performance	1/6
Financial Health	5/6
Dividends	2/6

STRA Stock Overview

Strategic Education, Inc., through its subsidiaries, provides education services through campus-based and online post-secondary education, and programs to develop job-ready skills.

Rewards

Trading at 38.5% below our estimate of its fair value

Earnings are forecast to grow 22.71% per year

Risk Analysis

Dividend of 3.78% is not well covered by earnings

Large one-off items impacting financial results

Strategic Education Competitors

Grand Canyon Education

NasdaqGS:LOPE

US$2.8b

Coursera

NYSE:COUR

US$2.2b

Laureate Education

NasdaqGS:LAUR

US$1.9b

Adtalem Global Education

NYSE:ATGE

US$1.4b

Price History & Performance

Summary of all time highs, changes and price drops for Strategic Education
Historical stock prices
Current Share Price	US$63.43
52 Week High	US$83.34
52 Week Low	US$48.01
Beta	0.51
1 Month Change	-12.27%
3 Month Change	16.26%
1 Year Change	-17.57%
3 Year Change	-63.67%
5 Year Change	-28.04%
Change since IPO	785.07%

Recent News & Updates

May 12

Strategic Education (NASDAQ:STRA) Is Due To Pay A Dividend Of US$0.60

Strategic Education, Inc. ( NASDAQ:STRA ) has announced that it will pay a dividend of US$0.60 per share on the 6th of...

May 04

Is There An Opportunity With Strategic Education, Inc.'s (NASDAQ:STRA) 35% Undervaluation?

In this article we are going to estimate the intrinsic value of Strategic Education, Inc. ( NASDAQ:STRA ) by taking the...

Mar 01

Strategic Education (NASDAQ:STRA) Will Pay A Dividend Of US$0.60

Strategic Education, Inc.'s ( NASDAQ:STRA ) investors are due to receive a payment of US$0.60 per share on 14th of...

Feb 28

Strategic Education: Turning The Corner

Strategic Education guided for MSD revenue decreases in 2022 versus double-digit declines in 2021. Operating margins may be close to bottoming, particularly as integration costs should be rolling out relatively soon. Concurrently, STRA continues to build its net cash position and has a well-supported dividend yield of 4%.

Shareholder Returns

	STRA	US Consumer Services	US Market
7D	0.5%	-0.6%	0.7%
1Y	-17.6%	-57.9%	-10.8%

Return vs Industry: STRA exceeded the US Consumer Services industry which returned -58% over the past year.

Return vs Market: STRA underperformed the US Market which returned -10.4% over the past year.

Price Volatility

Is STRA's price volatile compared to industry and market?
STRA volatility
STRA Average Weekly Movement	7.7%
Consumer Services Industry Average Movement	9.9%
Market Average Movement	7.8%
10% most volatile stocks in US Market	16.8%
10% least volatile stocks in US Market	2.9%

Stable Share Price: STRA is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 8% a week.

Volatility Over Time: STRA's weekly volatility (8%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1892	3,742	Karl McDonnell	https://www.strategiceducation.com

Strategic Education, Inc., through its subsidiaries, provides education services through campus-based and online post-secondary education, and programs to develop job-ready skills. It operates through three segments: U.S. Higher Education, Australia/New Zealand, and Education Technology Services.

Strategic Education Fundamentals Summary

How do Strategic Education's earnings and revenue compare to its market cap?
STRA fundamental statistics
Market Cap	US$1.54b
Earnings (TTM)	US$52.54m
Revenue (TTM)	US$1.10b

29.8x

P/E Ratio

1.4x

P/S Ratio

Is STRA overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
STRA income statement (TTM)
Revenue	US$1.10b
Cost of Revenue	US$600.08m
Gross Profit	US$500.13m
Other Expenses	US$447.59m
Earnings	US$52.54m

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	2.13
Gross Margin	45.46%
Net Profit Margin	4.78%
Debt/Equity Ratio	8.2%

How did STRA perform over the long term?

See historical performance and comparison

Dividends

3.8%

Current Dividend Yield

109%

Payout Ratio

Does STRA pay a reliable dividends?

See STRA dividend history and benchmarks

When do you need to buy STRA by to receive an upcoming dividend?
Strategic Education dividend dates
Ex Dividend Date	May 26 2022
Dividend Pay Date	Jun 06 2022
Days until Ex dividend	8 days
Days until Dividend pay date	19 days

Does STRA pay a reliable dividends?

See STRA dividend history and benchmarks

Valuation

Is Strategic Education undervalued compared to its fair value and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

Below Fair Value
Significantly Below Fair Value
PE vs Industry
PE vs Market
PEG Ratio
PB vs Industry

38.5%

Undervalued compared to fair value

Share Price vs. Fair Value

Below Fair Value: STRA ($63.43) is trading below our estimate of fair value ($103.22)

Significantly Below Fair Value: STRA is trading below fair value by more than 20%.

Price To Earnings Ratio

PE vs Industry: STRA is poor value based on its PE Ratio (29.8x) compared to the US Consumer Services industry average (17.1x).

PE vs Market: STRA is poor value based on its PE Ratio (29.8x) compared to the US market (15.5x).

Price to Earnings Growth Ratio

PEG Ratio: STRA is poor value based on its PEG Ratio (1.3x)

Price to Book Ratio

PB vs Industry: STRA is good value based on its PB Ratio (0.9x) compared to the US Consumer Services industry average (1.3x).

Future Growth

How is Strategic Education forecast to perform in the next 1 to 3 years based on estimates from 3 analysts?

Future Growth Score

3/6

Future Growth Score 3/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

22.7%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: STRA's forecast earnings growth (22.7% per year) is above the savings rate (1.9%).

Earnings vs Market: STRA's earnings (22.7% per year) are forecast to grow faster than the US market (12.6% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: STRA's revenue (1.8% per year) is forecast to grow slower than the US market (8% per year).

High Growth Revenue: STRA's revenue (1.8% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: Insufficient data to determine if STRA's Return on Equity is forecast to be high in 3 years time

Past Performance

How has Strategic Education performed over the past 5 years?

Past Performance Score

1/6

Past Performance Score 1/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

25.4%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: STRA has a large one-off loss of $19.7M impacting its March 31 2022 financial results.

Growing Profit Margin: STRA's current net profit margins (4.8%) are lower than last year (5.8%).

Past Earnings Growth Analysis

Earnings Trend: STRA's earnings have grown significantly by 25.4% per year over the past 5 years.

Accelerating Growth: STRA's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: STRA had negative earnings growth (-13.3%) over the past year, making it difficult to compare to the Consumer Services industry average (-15.6%).

Return on Equity

High ROE: STRA's Return on Equity (3%) is considered low.

Financial Health

How is Strategic Education's financial position?

Financial Health Score

5/6

Financial Health Score 5/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: STRA's short term assets ($417.8M) exceed its short term liabilities ($254.8M).

Long Term Liabilities: STRA's short term assets ($417.8M) exceed its long term liabilities ($388.7M).

Debt to Equity History and Analysis

Debt Level: STRA has more cash than its total debt.

Reducing Debt: Insufficient data to determine if STRA's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: STRA's debt is well covered by operating cash flow (111.7%).

Interest Coverage: STRA's interest payments on its debt are well covered by EBIT (38x coverage).

Balance Sheet

Dividend

What is Strategic Education current dividend yield, its reliability and sustainability?

Dividend Score

1/6

Dividend Score 1/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

3.78%

Current Dividend Yield

Upcoming Dividend Payment

Dividend Yield vs Market

Notable Dividend: STRA's dividend (3.78%) is higher than the bottom 25% of dividend payers in the US market (1.54%).

High Dividend: STRA's dividend (3.78%) is low compared to the top 25% of dividend payers in the US market (4.05%).

Stability and Growth of Payments

Stable Dividend: STRA's dividend payments have been volatile in the past 10 years.

Growing Dividend: STRA's dividend payments have fallen over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its high payout ratio (109.4%), STRA's dividend payments are not well covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its reasonable cash payout ratio (53%), STRA's dividend payments are covered by cash flows.

Next Steps

Explore strong dividend paying companies in the Consumer Services industry.

Management

How experienced are the management team and are they aligned to shareholders interests?

5.4yrs

Average management tenure

CEO

Karl McDonnell (55 yo)

9yrs

Tenure

US$6,317,825

Compensation

Mr. Karl McDonnell has been Chief Executive Officer at Strategic Education, Inc. May 2, 2013 and served as its President since June 2018. Mr. McDonnell served as the Chief Operating Officer of Strategic Ed...

CEO Compensation Analysis

Compensation vs Market: Karl's total compensation ($USD6.32M) is about average for companies of similar size in the US market ($USD5.45M).

Compensation vs Earnings: Karl's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.

Leadership Team

Experienced Management: STRA's management team is seasoned and experienced (5.4 years average tenure).

Board Members

Experienced Board: STRA's board of directors are considered experienced (8 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: STRA insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/05/16 00:00
End of Day Share Price	2022/05/16 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31