In the latest trading session, K12 (LRN) closed at $31.75, marking a +0.6% move from the previous day. This move lagged the S&P 500’s daily gain of 0.96%. At the same time, the Dow added 0.61%, and the tech-heavy Nasdaq lost 0.04%.
Heading into today, shares of the online education company had lost 11.62% over the past month, lagging the Consumer Discretionary sector’s loss of 7.97% and the S&P 500’s loss of 0.21% in that time.
Wall Street will be looking for positivity from K12 as it approaches its next earnings report date. On that day, K12 is projected to report earnings of $0.77 per share, which would represent year-over-year growth of 28.33%. Meanwhile, our latest consensus estimate is calling for revenue of $395.35 million, up 5.1% from the prior-year quarter.
LRN’s full-year Zacks Consensus Estimates are calling for earnings of $2.05 per share and revenue of $1.58 billion. These results would represent year-over-year changes of +19.88% and +2.85%, respectively.
Investors might also notice recent changes to analyst estimates for K12. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company’s business and profitability.
Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.
The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. K12 currently has a Zacks Rank of #2 (Buy).
Valuation is also important, so investors should note that K12 has a Forward P/E ratio of 15.37 right now. This valuation marks a no noticeable deviation compared to its industry’s average Forward P/E of 15.37.
Investors should also note that LRN has a PEG ratio of 0.77 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company’s expected earnings growth rate into account. LRN’s industry had an average PEG ratio of 0.82 as of yesterday’s close.
The Schools industry is part of the Consumer Discretionary sector. This group has a Zacks Industry Rank of 223, putting it in the bottom 13% of all 250+ industries.
The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
You can find more information on all of these metrics, and much more, on Zacks.com.
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