Strategic Education Inc

Strategic Education has completed a long-running share repurchase program originally announced in 2003, declared its latest dividend, and released second quarter 2026 earnings, drawing investor attention. The most followed narrative on Simply Wall St estimates the company's fair value at about $98.33, compared with a last close of $81.93, suggesting the stock is undervalued. The Education Technology Services segment saw revenue grow more than 30% in 2024, driven by the Sophia Learning portal and expanding corporate partnerships. Robust free cash flow supports continued shareholder returns through dividends and buybacks, which could enhance earnings per share. Risks include tighter Australian student visa settings and lower revenue per student from heavier scholarship use.

Strategic Education Inc reported second-quarter revenue of $330 million, up approximately 3% year-over-year, with adjusted earnings per share rising 16% to $1.76. Operating income increased 9% to $53 million, or 35% excluding a $13 million one-time charge related to an Australian labor matter. The Education Technology Services division saw revenue grow 15% to $42 million, driven by a 32% increase in Sophia Learning subscribers, while US Higher Education operating income jumped 56% to $32 million on a 2% revenue gain. Australia and New Zealand revenue declined nearly 3% to $67 million, and operating income was just $1 million after the charge. Management expressed confidence in achieving 200 basis points of EBIT margin expansion for the year, even including the one-time charge.