On Monday, BMO Capital Markets adjusted its outlook on Strategic Education Inc. (NASDAQ:STRA), increasing the price target to $130 from the previous $123, while maintaining an Outperform rating on the company's shares.
The revision follows the company's first-quarter results for 2024, which surpassed expectations with robust revenue and margin performance across all business segments.
Strategic Education's first-quarter performance was highlighted by revenue growth in the U.S. Higher Education (USHE) segment, attributed to higher-than-anticipated enrollments. The company also saw its Australia and New Zealand (ANZ) division return to year-over-year enrollment growth.
The Education Technology Services (ETS) segment continued to build momentum with its Sophia Learning and Workforce Edge products. Notably, all three segments experienced significant margin expansion.
The company's stock experienced an uptick following the announcement of these positive results. In response, BMO Capital has revised its estimates for Strategic Education upward in addition to the price target adjustment.
However, the company also announced a shelf offering after the market closed, filed on behalf of a selling shareholder. This development could potentially exert downward pressure on the stock price today.
InvestingPro Insights
Following the upbeat first-quarter results for 2024 from Strategic Education Inc. (NASDAQ:STRA), BMO Capital Markets has expressed a positive stance on the stock, raising the price target to $130. In line with this optimism, InvestingPro data reveals noteworthy metrics that may interest investors. The company holds a market capitalization of approximately $2.91 billion, with a P/E ratio standing at 27.81, reflecting investor confidence in the company's earnings capacity. Furthermore, Strategic Education has demonstrated strong revenue growth of 13.11% in Q1 2024, indicating a solid top-line expansion.
InvestingPro Tips also highlight several compelling factors: Strategic Education is trading at a low P/E ratio relative to near-term earnings growth, suggesting potential value for investors. Additionally, analysts have revised their earnings estimates upwards for the upcoming period, providing a positive outlook on the company's financial performance. It's important to note that the company's stock is currently in overbought territory according to the RSI, which investors may want to consider in the context of recent price movements.
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