Strategic Education reported a revenue of $321.47 million for the quarter ending in June 2025, which is a 3% increase from last year. Earnings per share (EPS) were $1.52, up from $1.33 the previous year. While the revenue slightly missed the Zacks Consensus Estimate of $323.39 million by -0.59%, the EPS exceeded expectations of $1.42, showing a positive surprise of +7.04%.

Regional Performance Highlights

Looking at regional results, Australia/New Zealand revenues were $69.14 million, below the expected $72.44 million, dropping 2.8% year-over-year. In contrast, Education Technology Services experienced a 49.61% revenue increase, totaling $36.69 million against a forecast of $35.2 million. The U.S. Higher Education Segment generated revenues of $215.64 million, slightly above expectations but reflecting a -0.45% annual decline. Over the last month, Strategic Education shares fell by 3.60%, while the Zacks S&P 500 composite had a 2.71% increase. On the global stage, the EUR/USD pair dropped near 1.1600 as traders awaited the U.S. Consumer Price Index (CPI) data. The Bank of England raised rates by 25 basis points due to inflation worries, while the anticipated U.S. CPI data could influence market expectations and decisions. Although Strategic Education’s EPS beat estimates by over 7%, the stock has not performed as well as the wider market recently. This suggests that investors might be focusing more on the slight revenue miss and general economic concerns.

Strategic Trading Considerations

We view the nearly 50% revenue growth in Education Technology Services as a significant and often overlooked indicator. With strong earnings, selling out-of-the-money puts could be a smart move to collect premiums while setting a lower entry point. This strategy could pay off if the stock’s recent decline is an overreaction to its mixed results. The July 2025 jobs report from the Bureau of Labor Statistics aligns with this outlook, showing unemployment steady at 3.5% amid a high demand for skilled workers. This environment is beneficial for providers of higher education and technology reskilling, reinforcing long-term value beyond short-term revenue numbers. Nevertheless, the immediate concern is the upcoming U.S. CPI data, which has created tension in the market. The CBOE Volatility Index (VIX) rose over 22 last week, indicating widespread market anxiety before the inflation report. A high inflation reading might lead to a market-wide selloff, regardless of individual company performances. Given the lingering inflation issues from 2022 and 2023, the Federal Reserve is likely to respond firmly to new data. To prepare for a potential negative surprise, we might consider buying puts on a broad market index like the SPY. This would help protect a portfolio from any downturn triggered by a rate hike. For traders anticipating a notable price move in Strategic Education, but unsure of the direction, a straddle could be a good option. By purchasing both a call and a put option at the same strike price and expiration date, we can profit from any significant volatility expected after the CPI release. Create your live VT Markets account and start trading now.

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