Another 2x Gain For Stride?

Very likely! Consider this: with 40% EPS growth, strong double-digit enrollment gains, and operating margins above 15%, Stride – a digital K-12 education company – is outperforming legacy early education and child care provider Bright Horizons on nearly every key metric. Yet, BFAM trades at roughly 30x EBIT, while Stride is valued at just 16x. The market is taking notice, which explains why LRN has surged 120% over the past year, compared to only 5% for BFAM.

Stride is expanding faster, scaling more efficiently, earning better margins – yet it’s still priced like a lower-tier company. This kind of setup is often overlooked by Wall Street – until it isn’t. While it might be smart to pick up LRN on a dip, investing in a single stock carries inherent risk. For a more balanced approach with strong upside potential, consider the High-Quality portfolio, which has consistently outperformed the S&P 500, delivering returns over 91% since inception.

LRN Beats BFAM On Most Metrics

• LRN posted about 13% revenue growth over the past 12 months vs 11% for BFAM
• Stride has a 15% operating margin vs less than 10% for BFAM
• It also carries lower debt and posts stronger operational and free cash flow margins
• Still, it trades at about 16x EBIT compared to 30x for BFAM
• Moreover, quarterly EPS growth (yoy) jumped to 42% in the most recent quarter, up from around 31% a year earlier

If that’s not compelling enough – here’s another point. Stride’s fully online model scales nationally without the drag of physical infrastructure, while BFAM must contend with growing labor and facility costs. And this trend isn’t limited to Stride – Grand Canyon Education, another digital-first education provider, is also gaining investor traction, reinforcing the market’s shift toward asset-light, high-margin education models.

That said, there’s always risk in concentrating investments in one or a few stocks. For a broader, lower-risk approach, take a look at Trefis’ High Quality Portfolio, a diversified basket of 30 stocks that has consistently outperformed the S&P 500 over the last four years. Why is that? Because the HQ Portfolio delivers stronger returns with less volatility than the benchmark index, as seen in the HQ Portfolio performance metrics.

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