On Friday, BMO Capital Markets adjusted its outlook on Strategic Education (NASDAQ:STRA), increasing the price target to $123 from the previous $103, while retaining an Outperform rating on the company's stock.
The revision follows the release of the company's fourth-quarter results for 2023, which surpassed expectations due to robust revenue and margin performance across various segments.
Strategic Education's positive outcome was attributed to several factors. Notably, the U.S. Higher Education (USHE) segment experienced revenue growth spurred by an increase in enrollments. Additionally, the Australia and New Zealand (ANZ) division saw a recovery in its pricing structure, while the Education Technology Services (ETS) division benefited from sustained momentum in its Sophia Learning and Workforce Edge offerings.
The comprehensive growth across all segments also led to a significant expansion in margins. This financial upturn reflected positively on Strategic Education's stock, which experienced a substantial increase following the earnings release.
The analyst from BMO Capital Markets acknowledged the company's strong performance, stating;
"4Q23 results beat expectations with broad-based revenue and margin strength across segments."
In light of these developments, BMO Capital has revised its estimates for Strategic Education, leading to the elevated price target. The new target represents an optimistic view of the company's future financial performance and stock potential.
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