Head to Head Review: Stride (NYSE:LRN) versus Gravitas Education (NYSE:GEHI)

Stride (NYSE:LRN) and Gravitas Education (NYSE:GEHI) are both small-cap consumer discretionary companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, dividends, earnings, profitability, risk and institutional ownership.

Profitability

This table compares Stride and Gravitas Education’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Stride	6.90%	14.60%	7.57%
Gravitas Education	N/A	N/A	N/A

Volatility & Risk

Stride has a beta of 0.29, suggesting that its share price is 71% less volatile than the S&P 500. Comparatively, Gravitas Education has a beta of 1.32, suggesting that its share price is 32% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Stride and Gravitas Education, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Stride	0	1	2	0	2.67
Gravitas Education	0	0	0	0	N/A

Stride currently has a consensus target price of $50.67, indicating a potential upside of 14.92%. Given Stride’s higher probable upside, equities analysts plainly believe Stride is more favorable than Gravitas Education.

Earnings & Valuation

This table compares Stride and Gravitas Education’s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Stride	$1.84 billion	1.03	$126.87 million	$2.96	14.90
Gravitas Education	$50.01 million	0.35	-$41.37 million	N/A	N/A

Stride has higher revenue and earnings than Gravitas Education.

Insider and Institutional Ownership

98.2% of Stride shares are held by institutional investors. Comparatively, 8.5% of Gravitas Education shares are held by institutional investors. 2.5% of Stride shares are held by insiders. Comparatively, 64.1% of Gravitas Education shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Summary

Stride beats Gravitas Education on 9 of the 11 factors compared between the two stocks.

About Stride

Stride, Inc., a technology-based education service company, provides proprietary and third-party online curriculum, software systems, and educational services to facilitate individualized learning for students primarily in kindergarten through 12th grade (K-12) in the United States and internationally. Its technology-based products and services enable clients to attract, enroll, educate, track progress, and support students. The company offers integrated package of systems, services, products, and professional expertise to support a virtual or blended public school; individual online courses and supplemental educational products; and products and services for the general education market focused on subjects, including math, English, science, and history for kindergarten through twelfth grade students. It also provides career learning products and services that are focused on developing skills to enter in industries, including information technology, health care, and business; and focused post-secondary career learning programs, which include skills training for software engineering, healthcare, and medical fields to adult learners under Galvanize, Tech Elevator, and MedCerts brand names, as well as provides staffing and talent development services to employers. It serves public and private schools, school districts, charter boards, consumers, employers, and government agencies. The company was formerly known as K12 Inc. and changed its name to Stride, Inc. in December 2020. Stride, Inc. was founded in 2000 and is headquartered in Reston, Virginia.

About Gravitas Education

Gravitas Education Holdings, Inc. provides early childhood education services in the People's Republic of China. It operates play-and-learn centers that offer services for the joint participation of 0-6-year-old children and their adult family members to promote children's development, foster bonding with family, and prepare them for their entry into kindergartens and primary schools. The company also operates student care centers; teaching facilities; and provides course content, training, support and guidance, and other services to franchisees and licensees. In addition, it develops and sells educational products and services; and distributes merchandise, such as teaching aids, educational toys, at-home educational products, and school uniforms through franchisees and other business partners, as well as directly to a market of families. Further, the company operates Qingtian Youpin, an e-commerce platform for maternity and children's products. The company was formerly known as RYB Education, Inc. and changed its name to Gravitas Education Holdings, Inc. in May 2022. Gravitas Education Holdings, Inc. was founded in 1998 and is based in Beijing, China.