Strategic Education, Inc. (STRA) stock analysis

P/E above its 5-year median

Strategic Education's P/E of 319.4 is above its own 5-year median of 27.0.

P/E above the industry

Strategic Education's P/E of 319.4 is above the Services-educational services median of 13.0.

EV/EBITDA below its 5-year median

Strategic Education's EV/EBITDA of 10.5 is below its 5-year median of 11.5.

P/B below the industry

Strategic Education's price-to-book of 0.80 is below the Services-educational services median of 2.30.

Trading below fair value

The share price of $54.30 is below our fair value estimate of $66.50.

Margin of safety under 20%

The price is 18.4% below fair value, less than the 20% cushion we look for.

Revenue growing under 10% a year

Revenue grew 6.0% a year over the last three fiscal years, short of the 10% we look for.

EPS growing 10%+ a year

Diluted EPS grew 40.8% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew -91.6% over the last twelve months, against a 5-year average of 8.0% a year.

Growing faster than the industry

Revenue grew 2.8% over the last twelve months; the Services-educational services median is 2.7%.

Company guidance

No outlook found in earnings releases from the last twelve months.

Gross margin trend

This company does not report gross profit.

Return on equity under 15%

Return on equity was 0.6% over the last twelve months and averaged 4.9% over five years; we look for 15% on both.

Return on capital under 10%

Return on invested capital was 1.9%, below the 10% that usually covers the cost of capital.

Return on equity below the industry

Strategic Education's return on equity of 0.6% is below the Services-educational services median of 0.6%.

Earnings grew over 5 years

Net income grew 8.0% a year on average over the last five fiscal years.

Net margin below its 5-year average

Net margin was 0.7% over the last twelve months, against a 5-year average of 6.9%.

Net margin above the industry

Strategic Education's net margin of 0.7% is above the Services-educational services median of -3.7%.

No debt

Strategic Education has no borrowings on its latest balance sheet.

Debt not rising

With no debt today, leverage cannot have risen.

Debt covered by cash flow

There is no debt to cover.

Interest well covered

No meaningful interest expense to cover.

Short-term assets cover short-term debts

Current assets are 1.08 times current liabilities.

Bankruptcy risk in the grey zone

The Altman Z-score is 2.50; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Strategic Education paid dividends worth 4.4% of the share price over the last twelve months.

Yield above Treasuries

The 4.4% yield is above the 4.4% on a 1-year Treasury.

Yield in the top quarter

The top quarter of US dividend payers yield 3.8% or more; Strategic Education yields 4.4%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 9 fiscal years.

Not covered by earnings

Dividends take 567% of net income, leaving little room.

Covered by free cash flow

Dividends take 33.1% of free cash flow.