Strategic Education, Inc. (STRA)

Price$81.30Cached quoteAs of 2026-09-04 16:23 UTC

AI: Undervalued

Price checkThe shares look inexpensive if recent earnings and cash generation broadly persist.

At the observed quote, the equity value is about $1.8 billion. Trailing-year net income through June was roughly $134.5 million and diluted earnings were near $6.00 a share, implying about 13.5 times earnings. Free cash flow—cash left after running and investing in the business—was approximately $168.6 million, more than 9% of market value. Applying a conservative 14–16 times recent earnings suggests $1.9–$2.2 billion. That modest discount supports Undervalued, provided current cash generation is durable; the quote appears to assume little growth or some reversal.

Big pictureProfit and cash have recovered strongly, but enrollment still moves unevenly across regions.

Revenue rose from $1.03 billion in 2020 to $1.27 billion in 2025, while operating income fell to $70.8 million in 2022 before recovering to $174.2 million in 2025. Trailing-year net income through June reached about $134.5 million, and operating cash flow reached $215.9 million. This recovery looks real, but not smooth: second-quarter U.S. enrollment slipped 0.5% and Australia/New Zealand enrollment fell 5.2%, while technology-services revenue grew 15.4%. The mixed enrollment record argues against paying a high growth valuation.

Business strengthLow debt and fewer shares help, though total payouts recently exceeded cash generation.

At June 30, cash and securities were $133.8 million, total debt was $106.7 million, and the revolving credit line was unused. Current assets of $290.1 million only modestly exceeded current liabilities of $264.8 million. First-half free cash flow was $92.4 million, below $72.7 million of buybacks plus $26.9 million of dividends. Still, shares fell from 24.5 million at 2024 year-end to 22.2 million, despite $10.3 million of share-based employee pay. Goodwill was $1.26 billion, about 77% of equity, so acquisition write-downs remain a real balance-sheet weakness.

What could change the storyEmployer-linked growth could unlock upside, while enrollment and funding rules set the downside.

Upside strengthens if technology-services revenue keeps growing by double digits, U.S. enrollment returns to growth, and employer-affiliated enrollment rises beyond 34.7%; its 46.2% segment margin could then lift group earnings. The bear case is persistent student losses, especially Australia/New Zealand’s 5.2% decline. Strayer also received 87.98% of 2025 cash-basis revenue from federal education funds, near the 90% limit, while new graduate-loan caps can restrict student financing. Further Australian losses or impairment of the region’s $526.5 million goodwill would undermine the current low-multiple thesis.

AI: News

Mixed second-quarter growthJuly results showed stronger profit and technology growth, while student counts weakened in two core regions.

On July 29, Strategic Education reported second-quarter revenue of $337.3 million, up 4.9%, and diluted earnings of $1.71 per share, up from $1.37. Revenue excluding exchange-rate changes rose 2.7%. Technology-services revenue gained 15.4%, while U.S. enrollment fell 0.5% and Australia/New Zealand enrollment fell 5.2%. Adjusted earnings per share, which remove selected unusual items, missed the analyst consensus by three to four cents, although revenue beat estimates by about 3%, making the update operationally strong but mixed against expectations.

Australian back-pay reserveAn Australian back-pay estimate sharply reduced regional profit and exposed unresolved legal uncertainty.

The July 29 filing recorded a $13.9 million reserve for estimated back pay, payroll taxes, benefits, and interest for casual academic staff from 2020–2025. Australia/New Zealand operating income fell to $1.0 million from $12.8 million, mainly because of the charge and higher instructional and technology costs. Management called the reserve its best estimate; the High Court process remains unresolved, so the ultimate loss could differ materially. That uncertainty matters because the region also carries $526.5 million of goodwill.

Graduate loan rules tightenedNew federal loan caps may constrain graduate students, directly testing a funding-dependent business.

Federal changes effective July 1 ended new Graduate PLUS loans except for limited grandfathering and capped ordinary graduate borrowing at $20,500 annually and $100,000 overall. Strategic Education’s July filing says Capella and Strayer each received a majority of 2025 revenue through federal student aid. The direct earnings effect remains uncertain, but students unable to replace that funding may enroll less or choose cheaper programs. Strayer’s 87.98% federal-funding ratio also leaves little room below the 90% regulatory ceiling.

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Total cash / debt

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Financial statements

	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015	2014	2013	2012	2011	2010	2009	2008
Revenue	$1.27B	$1.22B	$1.13B	$1.07B	$1.13B	$1.03B	$997.1M	$634.2M	$454.9M	$441.1M	$434.4M	$446.0M	$503.6M	$562.0M	$627.4M	$636.7M	$512.0M	$396.3M
Gross profit	$621.1M	$569.4M	$509.0M	$468.2M	—	—	—	—	$209.7M	$200.1M	$200.3M	$209.7M	$193.2M	$261.9M	$335.4M	$367.2M	$293.4M	$265.4M
Gross margin	48.97%	46.68%	44.93%	43.94%	—	—	—	—	46.10%	45.36%	46.11%	47.02%	38.35%	46.60%	53.46%	57.67%	57.31%	66.98%
Operating expenses	$1.09B	$1.06B	$1.04B	$994.7M	$1.06B	$918.3M	$886.6M	$656.9M	$402.6M	$383.6M	$130.6M	$128.0M	$160.5M	$148.3M	$156.3M	$151.4M	$121.1M	$138.6M
Operating income	$174.2M	$155.6M	$95.3M	$70.8M	$73.9M	$109.4M	$110.5M	−$22.7M	$52.2M	$57.5M	$69.7M	$81.7M	$32.7M	$113.6M	$179.1M	$215.8M	$172.4M	$126.9M
Operating margin	13.74%	12.76%	8.41%	6.64%	6.53%	10.64%	11.08%	−3.59%	11.48%	13.03%	16.04%	18.33%	6.49%	20.21%	28.55%	33.89%	33.67%	32.01%
EBITDA	$222.6M	$200.0M	$143.7M	$122.8M	$133.0M	$161.2M	$160.0M	$8.7M	$70.9M	$75.3M	$87.8M	$102.4M	$68.3M	$137.6M	$200.7M	$233.1M	$186.3M	$137.6M
EBITDA margin	17.55%	16.40%	12.69%	11.52%	11.75%	15.68%	16.05%	1.37%	15.59%	17.07%	20.21%	22.95%	13.56%	24.48%	31.98%	36.61%	36.39%	34.73%
Net income	$126.6M	$112.7M	$69.8M	$46.7M	$55.1M	$86.3M	$81.1M	−$15.7M	$20.6M	$34.8M	$40.0M	$46.4M	$16.4M	$65.9M	$106.0M	$131.3M	$105.1M	$80.8M
Net profit margin	9.98%	9.24%	6.16%	4.38%	4.87%	8.39%	8.14%	−2.47%	4.53%	7.89%	9.21%	10.39%	3.26%	11.73%	16.90%	20.61%	20.52%	20.39%
Basic EPSper basic share	$5.57	$4.81	$2.98	$1.97	$2.30	$3.81	$3.73	-$1.03	$1.93	$3.28	$3.78	$4.39	$1.55	$5.79	$8.91	$9.78	$7.67	$5.77
Diluted EPSper diluted share	$5.41	$4.67	$2.91	$1.94	$2.28	$3.77	$3.67	-$1.03	$1.84	$3.21	$3.73	$4.35	$1.55	$5.76	$8.88	$9.70	$7.60	$5.67

Review official source filings ↗

Owners

Reported shareholders

Reference date Jun 30, 2026

17.11%of listed shares

BlackRock, Inc.3.8M shares · Jun 30, 2026

View holders

Top 20 reported holders of STRA
Holder	% owned
BlackRock, Inc.	17.11%3.8M shares
VANGUARD PORTFOLIO MANAGEMENT LLC	6.57%1.46M shares
DIMENSIONAL FUND ADVISORS LP	6.56%1.46M shares
BANK OF MONTREAL /CAN/	5.66%1.26M shares
VANGUARD CAPITAL MANAGEMENT LLC	4.26%945.4K shares
STATE STREET CORP	4.10%909.68K shares
GEODE CAPITAL MANAGEMENT, LLC	2.70%598.9K shares
T. Rowe Price Investment Management, Inc.	2.67%592.69K shares
MORGAN STANLEY	2.66%591.72K shares
MARSHFIELD ASSOCIATES	2.52%559.01K shares
LSV ASSET MANAGEMENT	2.47%548.03K shares
ARROWSTREET CAPITAL, LIMITED PARTNERSHIP	2.02%447.69K shares
Qube Research & Technologies Ltd	1.86%413.08K shares
Nuveen, LLC	1.61%357.12K shares
AQR CAPITAL MANAGEMENT LLC	1.55%343.99K shares
CHARLES SCHWAB INVESTMENT MANAGEMENT INC	1.53%339.54K shares
SILBERMAN ROBERT S	≈1.44%319.87K shares
TWO SIGMA INVESTMENTS, LP	1.32%292.59K shares
ALGERT GLOBAL LLC	1.24%275.34K shares
VAN LANSCHOT KEMPEN INVESTMENT MANAGEMENT N.V.	1.15%255.39K shares

Percentages use 22.21M shares of this listed class outstanding on Jun 30, 2026. ≈ compares the latest reported holding with a share total from a different date; it is not a confirmed current stake.

Gray completes the 100% scale. Reported positions may overlap; holders have different reporting dates.

Source: SEC Form 13F ↗Updated Sep 29, 2026 · Quarterly data

Insider buys & sells

Jul 1, 2024–Jun 30, 2026

Buys9$1.92M disclosed value

Sells (SEC code S)20$9.37M disclosed value

Transaction	Insider	Type	Shares	Price	Value	Owned after
Jun 4, 2026Form 4 · 10b5-1	Hokenson ChristaCHIEF HUMAN RESOURCES OFFICER	SellCommon Stock	2.0K	$80.00	$160.0K	65.2K
May 5, 2026Form 4	WAITE G THOMAS IIIDirector	SellCommon Stock	666	$77.68	$51.7K	16.7K
Apr 24, 2026Form 4	Thawley MichaelDirector	BuyCommon Stock	665	$72.71	$48.4K	12.2K
Mar 18, 2026Form 4 · 10b5-1	HERRAIZ LIZETTE BENEDIGENERAL COUNSEL	SellCommon Stock	3.0K	$79.88	$238.2K	55.6K
Mar 13, 2026Form 4 · 10b5-1	HERRAIZ LIZETTE BENEDIGENERAL COUNSEL	SellCommon Stock	4.9K	$80.20	$393.9K	58.6K

Review ownership filings at SEC.gov ↗

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Strategic Education, Inc. (STRA)

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