What Happened?
Shares of online education Stride (NYSE: LRN) jumped 20% in the afternoon session after the company reported fourth-quarter 2025 results that beat Wall Street's expectations and provided upbeat guidance for the upcoming quarter.
The company posted revenue of $631.3 million, representing a 7.5% increase year-over-year and surpassing analyst estimates. Profitability was also a bright spot, with adjusted earnings per share of $2.50, a 7.8% beat compared to the consensus forecast. Furthermore, Stride's operating margin expanded to 23.3% from 21.3% in the same period last year, indicating improved efficiency. Looking ahead, the company guided for next quarter's revenue to be approximately $630 million, which was also ahead of expectations.
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What Is The Market Telling Us
Stride’s shares are somewhat volatile and have had 12 moves greater than 5% over the last year. But moves this big are rare even for Stride and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 7 days ago when the stock gained 2.8% on the news that President Trump cooled fears of a transatlantic trade war by calling off scheduled tariffs on European allies.
The rally followed a productive meeting in Davos with NATO Secretary General Mark Rutte, where a "framework of a future deal" regarding Greenland and the Arctic region was established. By explicitly ruling out the use of military force and suspending the 10% tariffs previously set for February 1st, the administration provided the "sigh of relief" the market desperately needed after Tuesday's sharp sell-off. Technology and semiconductor leaders like Nvidia and AMD spearheaded the recovery as investors quickly pivoted back into growth stocks. The "Sell America" trade from the prior session reversed sharply, with the Nasdaq Composite jumping 1.5% and the S&P 500 erasing its 2026 losses. This rebound was further supported by a stabilization in the bond market; as tariff-related inflation fears subsided, the 10-year Treasury yield retreated from its recent highs, creating a more favorable backdrop for equity valuations across the board.
Stride is up 34.7% since the beginning of the year, but at $87.03 per share, it is still trading 48.8% below its 52-week high of $169.81 from August 2025. Investors who bought $1,000 worth of Stride’s shares 5 years ago would now be looking at an investment worth $3,622.
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