Higher education company Strategic Education (NASDAQ: STRA) met Wall Street’s revenue expectations in Q3 2026, with revenue up 1.6% year on year to $325.1 million. Its non-GAAP profit of $1.72 per share was 11.9% below analysts’ consensus estimates.

For more on Strategic Education, read our free full research report.

Revenue growth

A company’s long-term revenue performance is one signal of its overall quality. Any business can have short-term success, but a top-tier one grows for years. Strategic Education’s revenue grew at a weak 2.5% annualized rate over the last five years, falling short of our benchmarks.

Long-term growth matters the most, but within consumer discretionary, a longer historical view may miss a company riding a successful new product or trend. Strategic Education’s annualized revenue growth of 3.3% over the last two years aligns with its five-year trend, suggesting its demand was consistently weak.

The company’s domestic and international student counts offer further insight into its revenue dynamics, totaling 84,725 and 17,101, respectively, in the latest quarter. Over the last two years, Strategic Education’s domestic student count was flat while its international student count declined an average of 2% year on year.

This quarter, Strategic Education grew its revenue by 1.6% year on year, and its $325.1 million of revenue was in line with Wall Street’s consensus estimates.

Looking ahead, sell-side analysts expect revenue to grow 2.5% over the next 12 months, according to S&P, similar to its two-year rate. This underwhelming projection implies its newer products and services will not yet accelerate revenue growth.

Operating margin

Operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses – everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes.

Strategic Education’s operating margin has been trending down over the last 12 months and averaged 8.4% over the last two years. The company’s profitability was mediocre for a consumer discretionary business and shows it couldn’t pass its higher operating expenses onto its customers.

This quarter, Strategic Education reported an operating margin of negative 26.9%, down 38.5 percentage points year on year. This contraction shows it was less efficient because its expenses grew faster than its revenue.

Earnings per share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Strategic Education’s EPS grew at a 5.6% compounded annual growth rate over the last five years. This performance was better than its revenue growth but doesn’t tell us much about its business quality because its operating margin improvement lagged that of peers.

In Q3, Strategic Education reported adjusted EPS of $1.72, up from $1.63 in the same quarter last year. Despite growing year on year, EPS missed analysts’ consensus estimates. Over the next 12 months, Wall Street expects Strategic Education’s full-year EPS to grow 26% from $6.63 to $8.36, according to S&P.

Key takeaways from Strategic Education’s Q3 results

Strategic Education’s EPS and EBITDA both fell short of Wall Street’s consensus estimates, leaving few positives in a quarter that could have been better. Shares remained flat at $74.02 immediately after the results.

Strategic Education’s latest quarter was underwhelming. One earnings report doesn’t define a company’s quality, though, so let’s explore whether the stock is a buy at the current price. The latest quarter is only one piece of the longer-term business quality puzzle. Quality, combined with valuation, can help determine if the stock is a buy. For more on Strategic Education, read the free full research report here.