STRIDE, INC.

Recommendation history

• Q2 2023HoldHold. OpenText delivered strong Q3 execution—$1.4 billion revenue, 53% cloud-bookings growth, $463.7 million adjusted EBITDA and $348.2 million free cash flow—but cloud revenue grew only 4.4% and the company pushed its medium-term targets from FY26 to FY27. Deleveraging by $2 billion and a $250 million buyback improve capital returns, yet FY25 EBITDA margin is guided down to 32%-33% as OpenText invests in cloud and AI, leaving the growth-to-profitability tradeoff unresolved.
• Q4 2022HoldHold: Stride delivered strong FY2022 execution—revenue rose 9.8% to $1.690 billion, adjusted operating income increased 16.6% to $188.2 million, and free cash flow reached $139.3 million—driven by Career Learning revenue growth above 60% and Adult Learning growth. The main tension is FY2023 visibility: management provided no formal guidance, expects compensation and inflation pressure to tighten margins, and acknowledged funding growth may lag inflation; the long-term opportunity is attractive, but the call does not yet provide a clean near-term entry signal.
• Q3 2021BuyBuy: Agnico Eagle delivered a strong first half with more than 1 million ounces produced, cash costs below $740/oz, over $3/share of operating cash flow and $1.67/share of cash flow per share, while maintaining its 2021 production and cost outlook. The business is targeting 24% production growth through 2024, supported by Canadian Malartic, Nunavut operations and extensive brownfield exploration, although inflation, Hope Bay’s unresolved expansion economics and permitting timelines temper the upside.
• Q4 2019HoldHold: FY19 was strong, with revenue up 10.7% to $1.016 billion, adjusted operating income up 34% to $62.2 million, and free cash flow up 49% to $93.2 million. However, the loss of nearly 10,000 Georgia Cyber Academy students should leave FY20 revenue growth below consensus, while management offered only an unofficial promise of double-digit profit growth and FY20 revenue guidance was deferred to October.
• Q2 2024BuyBuy: Stride delivered a strong beat and raise, with Q2 revenue up 10% to $504.9 million, adjusted operating income up 24% to $94.9 million, and record enrollment of 196,500. FY2024 revenue guidance increased to $1.99-$2.04 billion, but the upside case still depends on execution in career learning and new products while adult learning remains under pressure.
• Q2 2018HoldHOLD: OpenText delivered a strong standalone Q2—$897 million revenue, up 7.8% in constant currency, cloud revenue up 16%, and 37.7% adjusted EBITDA margin—but the Micro Focus acquisition creates substantial execution and balance-sheet risk. The $5.8 billion deal is expected to support $5.75-$5.9 billion of FY2024 revenue and $2.1-$2.24 billion of adjusted EBITDA, yet pro forma net leverage rises to 3.8x, Micro Focus revenue was declining mid-single digits, and near-term free cash flow is burdened by integration and restructuring costs.
• Q1 2024BuyBuy: Stride delivered a strong Q1 with revenue up 13% to $480.2 million, enrollment up 8% to nearly 188,000, and adjusted operating income of $14.8 million versus a $19.9 million loss last year. FY2024 guidance is $1.96-$2.03 billion of revenue and $250-$275 million of adjusted operating income, supported by improving execution, retention, conversion, and margins; the main tension is whether the enrollment rebound and efficiency gains can persist after a weak prior-year comparison.