Is Stride Set for Further Gains After Recent Double Digit Growth in 2025?

If you have been watching Stride stock with an eye on potential investment, you are definitely not alone. This is one company that has been on quite a journey, so the question, as always, is what comes next. In the last week, Stride’s share price slid by 4.3%, and it is down by 10.7% over the past month. But if you take a step back, the story gets a lot more interesting. Since the start of the year, the stock is up an impressive 35.0%, with even bigger gains when you zoom out: Stride is up 83.4% in the past year, 224.1% over three years, and an astonishing 371.3% for five. That kind of performance tends to grab attention, and it is no wonder investors are weighing up whether this is a rare opportunity or a sign that Stride is running hot.

What is driving these moves? Market activity across education and digital learning platforms (sectors where Stride is a notable player) has been lively, reflecting broader shifts in how people access learning and skills. Investors may be recalibrating risk and reward as sentiment swings between growth optimism and caution about higher valuations. With all this momentum and attention, clearly valuation becomes top of mind.

As for the numbers, Stride currently racks up a value score of 4 out of 6 on our valuation checklist, a clear indication that the company still looks undervalued by several measures, even after its huge run-up. But what do these valuation checks really mean, and how should you use them? Let us dig into each approach and, later on, explore an even more insightful way to look at the real value behind the stock.

Stride delivered 83.4% returns over the last year. See how this stacks up to the rest of the Consumer Services industry.

Approach 1: Stride Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model is a classic valuation tool that estimates the present value of a company by projecting its future cash flows and then discounting them back to today's dollars. The idea is to look at how much cash Stride can generate over time and what that future stream of money is really worth right now, given some reasonable assumptions about growth and risk.

Currently, Stride’s Free Cash Flow stands at $360.2 million, with analyst estimates and model projections showing this figure rising steadily in the coming years. For example, forecasts point to Free Cash Flow reaching $427 million in 2027, and, based on extended projections, as high as $573.6 million by 2035. These estimates use a two-stage approach, which factors in higher growth early on, followed by a more moderate, steady increase later. All values are measured in US dollars.

With this methodology, Stride’s intrinsic value per share is calculated at $244.86. Compared to recent share prices, this represents a notable discount of about 41.4%. This suggests that Stride is trading well below its underlying worth based on cash flow fundamentals.

Result: UNDERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Stride.

Our Discounted Cash Flow (DCF) analysis suggests Stride is undervalued by 41.4%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

Approach 2: Stride Price vs Earnings (P/E Ratio)

The price-to-earnings (P/E) ratio is a widely used valuation metric for profitable companies because it directly compares a company’s share price to its earnings per share. For investors, the P/E ratio provides a snapshot of how much they are paying for each dollar of profit Stride generates, making it useful for judging whether a stock looks expensive or cheap compared to others.

Growth expectations and perceived risk play a big role in shaping what counts as a “normal” or “fair” P/E. If investors expect earnings to grow quickly and see relatively low risk, they are typically willing to pay a higher multiple. Slower growth or higher risk tends to mean a lower, more cautious P/E.

Stride currently trades at a P/E ratio of 21.5x. When we compare this to the wider Consumer Services industry average of 18.3x and a peer average of 22.5x, Stride’s multiple looks only slightly below the average of its peers, but above its broader sector. However, ratios like these do not account for company-specific strengths or risks.

This is where the Simply Wall St “Fair Ratio” offers more nuance. The Fair Ratio (24.0x) is calculated using proprietary factors, including Stride’s earnings growth outlook, profit margins, market capitalization, and company-specific risks. This approach provides a more tailored picture of valuation potential than just industry or peer averages. By using the Fair Ratio, investors get a clearer view that is more meaningful in the context of Stride’s unique fundamentals.

Comparing Stride’s actual P/E (21.5x) to its Fair Ratio (24.0x), the stock appears undervalued on this metric.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Stride Narrative

Earlier we mentioned that there is an even better way to understand valuation. Let us introduce you to Narratives. A Narrative is your personal, story-driven view of a company's future. It brings together your own forecasts for Stride’s future revenue, earnings, and profit margins, and then ties those assumptions to a fair value estimate for the stock.

Narratives connect the story you believe about Stride to financial outcomes, allowing you to see in clear terms how your perspective translates into a share price. Available right now on Simply Wall St’s Community page, used and shared by millions of investors, Narratives are a practical tool that help you quickly compare your fair value to the market price, making buy or sell decisions more grounded and dynamic.

Because Narratives update automatically as new news or earnings arrive, they help you stay on top of changing information and reassess opportunities as the story evolves. For example, one investor may see Stride’s long-term growth potential in digital education and set a fair value well above $240, while another, concerned about regulatory limits, may estimate a much lower value around $160. Narratives make these distinct perspectives visible and actionable, so you are always investing according to your own understanding and strategy.

Do you think there's more to the story for Stride? Create your own Narrative to let the Community know!

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.

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