NasdaqGS:STRA

Stock Analysis Report

Executive Summary

Strategic Education, Inc., through its subsidiaries, provides a range of post-secondary education and non-degree programs in the United States.

Rewards

Trading at 35.3% below its fair value

Earnings are forecast to grow 34.27% per year

Became profitable this year

Risk Analysis

Shareholders have been substantially diluted in the past year

Unstable dividend track record



Snowflake Analysis

Flawless balance sheet average dividend payer.


Similar Companies

Share Price & News

How has Strategic Education's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: STRA has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-0.9%

STRA

-6.1%

US Consumer Services

-1.3%

US Market


1 Year Return

42.1%

STRA

26.4%

US Consumer Services

22.0%

US Market

Return vs Industry: STRA exceeded the US Consumer Services industry which returned 42% over the past year.

Return vs Market: STRA exceeded the US Market which returned 24.7% over the past year.


Shareholder returns

STRAIndustryMarket
7 Day-0.9%-6.1%-1.3%
30 Day3.3%2.1%1.6%
90 Day23.0%9.6%8.9%
1 Year44.0%42.1%26.7%26.4%24.7%22.0%
3 Year104.8%97.2%113.3%103.1%49.4%39.7%
5 Year150.1%140.9%187.0%154.4%78.1%58.5%

Price Volatility Vs. Market

How volatile is Strategic Education's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

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

35.1%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: STRA ($160.87) is trading below our estimate of fair value ($248.83)

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 (46.3x) compared to the Consumer Services industry average (28.6x).

PE vs Market: STRA is poor value based on its PE Ratio (46.3x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: STRA is poor value based on its PEG Ratio (1.4x)


Price to Book Ratio

PB vs Industry: STRA is overvalued based on its PB Ratio (2.4x) compared to the US Consumer Services industry average (2.1x).


Next Steps

Future Growth

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

34.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: STRA's forecast earnings growth (34.3% per year) is above the savings rate (1.7%).

Earnings vs Market: STRA's earnings (34.3% per year) are forecast to grow faster than the US market (14.3% per year).

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

Revenue vs Market: STRA's revenue (4.6% per year) is forecast to grow slower than the US market (7.5% per year).

High Growth Revenue: STRA's revenue (4.6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: STRA's Return on Equity is forecast to be low in 3 years time (11.3%).


Next Steps

Past Performance

How has Strategic Education performed over the past 5 years?

-21.8%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: STRA has high quality earnings.

Growing Profit Margin: STRA became profitable in the past.


Past Earnings Growth Analysis

Earnings Trend: STRA's earnings have declined by -21.8% per year over the past 5 years.

Accelerating Growth: STRA has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: STRA has become profitable in the last year, making it difficult to compare its past year earnings growth to the Consumer Services industry (16.4%).


Return on Equity

High ROE: STRA's Return on Equity (5.2%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Strategic Education's financial position?


Financial Position Analysis

Short Term Liabilities: STRA's short term assets ($505.6M) exceed its short term liabilities ($157.8M).

Long Term Liabilities: STRA's short term assets ($505.6M) exceed its long term liabilities ($178.7M).


Debt to Equity History and Analysis

Debt Level: STRA is debt free.

Reducing Debt: STRA has no debt compared to 5 years ago when its debt to equity ratio was 153.5%.

Debt Coverage: STRA has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: STRA has no debt, therefore coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: STRA has a low level of unsold assets or inventory.

Debt Coverage by Assets: Insufficient data to determine if STRA's debt is covered by short term assets.


Next Steps

Dividend

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

1.49%

Current Dividend Yield


Dividend Yield vs Market

company1.5%marketbottom25%1.4%markettop25%3.7%industryaverage1.4%forecastin3Years1.5%

Current dividend yield vs market & industry

Notable Dividend: STRA's dividend (1.49%) is higher than the bottom 25% of dividend payers in the US market (1.4%).

High Dividend: STRA's dividend (1.49%) is low compared to the top 25% of dividend payers in the US market (3.66%).


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 increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (57.6%), STRA's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: STRA's dividends in 3 years are forecast to be well covered by earnings (31.8% payout ratio).


Next Steps

Management

What is the CEO of Strategic Education's salary, the management and board of directors tenure and is there insider trading?

4.8yrs

Average management tenure


CEO

Karl McDonnell (53yo)

6.7yrs

Tenure

US$4,600,125

Compensation

Mr. Karl McDonnell serves as the President and Chief Executive Officer at Strayer Education Inc. since June 2018. Mr. McDonnell was Chief Executive Officer of Strayer Education Inc. from May 2, 2013 to Jun ...


CEO Compensation Analysis

Compensation vs Market: Karl's total compensation ($USD4.60M) is about average for companies of similar size in the US market ($USD4.99M).

Compensation vs Earnings: Karl's compensation has been consistent with company performance over the past year.


Management Age and Tenure

4.8yrs

Average Tenure

49yo

Average Age

Experienced Management: STRA's management team is considered experienced (4.8 years average tenure).


Board Age and Tenure

8.5yrs

Average Tenure

62.5yo

Average Age

Experienced Board: STRA's board of directors are considered experienced (8.5 years average tenure).


Insider Trading

Insider Buying: STRA insiders have only sold shares in the past 3 months.


Recent Insider Transactions

SellUS$2,674,88915 Nov 19
J. Gilligan
EntityIndividual
Role
Vice Chairman
Vice Chairman
Shares20,000
Max PriceUS$136.40
SellUS$1,163,85314 Jun 19
Todd Milano
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares6,449
Max PriceUS$181.04
SellUS$252,49014 Jun 19
John Casteen
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares1,400
Max PriceUS$180.35
SellUS$535,77030 May 19
G. Waite
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares3,000
Max PriceUS$178.59
SellUS$3,685,03608 May 19
Karl McDonnell
EntityIndividual
Role
Chief Executive Officer
President
Shares22,436
Max PriceUS$165.12
SellUS$420,48308 May 19
Robert Grusky
EntityIndividual
Role
Lead Director
Presiding Independent Director
Shares2,515
Max PriceUS$168.00
SellUS$984,72202 Apr 19
J. Gilligan
EntityIndividual
Role
Vice Chairman
Vice Chairman
Shares7,500
Max PriceUS$131.69
SellUS$989,54528 Mar 19
J. Gilligan
EntityIndividual
Role
Vice Chairman
Vice Chairman
Shares7,500
Max PriceUS$132.18
SellUS$773,02306 Mar 19
Daniel Jackson
EntityIndividual
Role
Chief Financial Officer
Executive VP & CFO
Shares5,418
Max PriceUS$143.50
SellUS$279,79506 Mar 19
Lizette Herraiz
EntityIndividual
Role
Chief Legal Officer
Senior VP
Shares1,995
Max PriceUS$141.21
SellUS$366,33605 Mar 19
Thomas Aprahamian
EntityIndividual
Role
Chief Accounting Officer
Chief Accounting Officer
Shares2,650
Max PriceUS$138.24

Ownership Breakdown

Dilution of Shares: Shareholders have been substantially diluted in the past year, with total shares outstanding growing by 72.4%.


Management Team

  • Rob Silberman (61yo)

    Executive Chairman of the Board

    • Tenure: 16.9yrs
    • Compensation: US$4.60m
  • Thomas Aprahamian (50yo)

    Chief Accounting Officer

    • Tenure: 4.8yrs
    • Compensation: US$514.05k
  • Terese Wilke

    Manager of Investor Relations

    • Karl McDonnell (53yo)

      President

      • Tenure: 6.7yrs
      • Compensation: US$4.60m
    • Sondra Stallard (69yo)

      President Emerita and Director of Accreditation & Regulatory Affairs - Strayer University

      • Tenure: 8.3yrs
      • Compensation: US$799.80k
    • Dan Jackson (44yo)

      Executive VP & CFO

      • Tenure: 4.8yrs
      • Compensation: US$1.81m
    • Andy Watt (41yo)

      Senior VP & COO

      • Lizette Herraiz (44yo)

        Senior VP

        • Tenure: 1.4yrs
        • Compensation: US$1.87m
      • Christa Hokenson (48yo)

        Chief Human Resources

        • Jen Towns

          Chief Marketing Officer

          • Tenure: 1.3yrs

        Board Members

        • Bob Grusky (61yo)

          Presiding Independent Director

          • Tenure: 2yrs
          • Compensation: US$152.50k
        • Todd Milano (66yo)

          Independent Director

          • Tenure: 23.5yrs
          • Compensation: US$135.00k
        • Rob Silberman (61yo)

          Executive Chairman of the Board

          • Tenure: 16.9yrs
          • Compensation: US$4.60m
        • John Casteen (76yo)

          Independent Director

          • Tenure: 8.8yrs
          • Compensation: US$157.50k
        • G. Waite (67yo)

          Independent Director

          • Tenure: 23.5yrs
          • Compensation: US$160.00k
        • Charlotte Beason (71yo)

          Independent Director

          • Tenure: 23.5yrs
          • Compensation: US$150.00k
        • J. Gilligan (64yo)

          Vice Chairman

          • Tenure: 1.4yrs
          • Compensation: US$1.24m
        • H. Dallas (60yo)

          Independent Director

          • Tenure: 1.4yrs
          • Compensation: US$57.50k
        • Karl McDonnell (53yo)

          President

          • Tenure: 6.7yrs
          • Compensation: US$4.60m
        • Nate Fick (41yo)

          Independent Director

          • Tenure: 3.3yrs
          • Compensation: US$155.00k

        Company Information

        Strategic Education, Inc.'s company bio, employee growth, exchange listings and data sources


        Key Information

        • Name: Strategic Education, Inc.
        • Ticker: STRA
        • Exchange: NasdaqGS
        • Founded: 1892
        • Industry: Education Services
        • Sector: Consumer Services
        • Market Cap: US$3.466b
        • Shares outstanding: 21.48m
        • Website: https://www.strategiceducation.com

        Number of Employees


        Location

        • Strategic Education, Inc.
        • 2303 Dulles Station Boulevard
        • Herndon
        • Virginia
        • 20171
        • United States

        Listings

        TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
        STRANasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDJul 1996
        SQEDB (Deutsche Boerse AG)YesCommon StockDEEURJul 1996

        Biography

        Strategic Education, Inc., through its subsidiaries, provides a range of post-secondary education and non-degree programs in the United States. The company operates through three segments: Strayer University, Capella University, and Non-Degree Programs. It operates Strayer University that provides undergraduate and graduate degree programs in business administration, accounting, information technology, education, health services administration, public administration, and criminal justice for working adult students through its 74 physical campuses located in the eastern United States, as well as through online; and an executive MBA online through its Jack Welch Management Institute. The company also operates Capella University, an online post-secondary education company, which offers various bachelor's, master's, and doctoral degree programs in public service leadership, nursing and health sciences, psychology, business and technology, counseling and human services, and education primarily for working adults. In addition, it is involved in the operation of a software development school that provides Web Development, iOS development, and UX design programs in person at classrooms in Provo and Salt Lake City, Utah; Dallas, Texas; and Phoenix, Arizona, as well as through online. Further, the company operates a software engineering school for women, which offers software development programs in person through classrooms in the San Francisco Bay area; and provides non-degree Web and application software development courses, as well as self-paced online learning courses. It offers its non-degree programs primarily for workers and their employers. Strategic Education, Inc. was founded in 1892 and is headquartered in Herndon, Virginia. 


        Company Analysis and Financial Data Status

        All financial data provided by Standard & Poor's Capital IQ.
        DataLast Updated (UTC time)
        Company Analysis2020/01/25 23:54
        End of Day Share Price2020/01/24 00:00
        Earnings2019/09/30
        Annual Earnings2018/12/31


        Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.