On Thursday, Stride Inc. (NYSE:LRN) shares saw its price target increased by Citi from $75.00 to $77.00, with the firm maintaining a Buy rating on the stock. This adjustment comes after Stride's third-quarter results for fiscal year 2024 and an upward revision of its full-year guidance.
Citi's decision to raise the price target is a reflection of the updated financial model, which takes into account Stride's recent performance and outlook for the fiscal year. The firm's analysts have kept their revenue estimates for fiscal year 2024 consistent with the midpoint of Stride's updated guidance range, while forecasting minimal changes for subsequent years.
The improved forecast for Stride's Adjusted Operating Income, which is expected to grow by approximately 4.1% for the fiscal year 2024, has also influenced Citi's outlook. This growth is anticipated to have a ripple effect on the coming years, with an estimated increase in the range of about 1.6% to 3.5%.
The positive revisions in Stride's financial outlook have led to an increase in the diluted earnings per share (EPS) forecasts, with a significant 9.4% rise for fiscal year 2024 and an average increase of around 2.4% for years beyond 2024. This bolstered EPS projection is a key factor in the revised price target.
Citi's updated price target of $77 for Stride's shares is based on a discounted cash flow (DCF) and multiple-based valuation. The firm's analysts have reaffirmed their confidence in Stride by maintaining a Buy rating, indicating their positive view on the stock's potential performance.
InvestingPro Insights
Stride Inc. (NYSE:LRN) has recently caught the eye of Citi analysts with its promising third-quarter results and revised full-year guidance for fiscal year 2024. To complement this analysis, InvestingPro data shows a robust financial position for Stride, with a market capitalization of $2.69 billion and a P/E ratio sitting attractively at 14.5, suggesting that the stock is trading at a low price relative to near-term earnings growth. The company's revenue growth remains strong, with a 9.97% increase over the last twelve months as of Q3 2024.
InvestingPro Tips highlight Stride's significant return over the last week, with a 10.43% price total return, and a remarkable 67.32% return over the past year. These figures underscore the stock's impressive performance in the short and medium term. Additionally, analysts predict the company will be profitable this year, a forecast that aligns with the positive sentiment expressed by Citi. For investors keen on delving deeper, there are more InvestingPro Tips available, including insights on cash flows, debt levels, and liquidity, which can be accessed through InvestingPro's platform.
For those considering an investment in Stride, using the coupon code PRONEWS24 will provide an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro. With several additional tips listed on InvestingPro, potential investors have the opportunity to gain a comprehensive understanding of Stride's financial health and future prospects.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.