Stride Inc. appoints KPMG as new auditor for FY 2025

Stride, Inc. (NYSE:LRN), a Delaware-based provider of educational services, announced a change in its independent registered public accounting firm. The company's Audit Committee has appointed KPMG LLP as its new auditor for the fiscal year ending June 30, 2025. The decision was made following a competitive evaluation process involving several accounting firms.

The change comes into effect immediately, displacing the company's previous auditor, BDO USA, P.C. BDO's reports on Stride's financial statements had not raised any issues related to accounting principles or practices, financial statement disclosure, or auditing scope or procedure that would have required a mention in their reports for the fiscal years ended June 30, 2024, and June 30, 2023.

However, BDO's audit report dated August 15, 2023, did note an adverse opinion regarding the company's internal control over financial reporting as of June 30, 2023, due to material weaknesses in information technology general controls.

Despite the noted material weakness, there were no disagreements or "reportable events" as defined by SEC regulations between Stride and BDO during the fiscal years or the interim period through August 15, 2024. In accordance with SEC protocol, Stride provided BDO with the disclosures regarding the auditor change and has included BDO's letter agreeing with the disclosures in its SEC filing as Exhibit 16.1.

Furthermore, during the same periods, Stride did not consult KPMG on any matters that would have required disclosure, such as accounting principles or auditing issues.

In other recent news, Stride Inc (NYSE:LRN). has been in the spotlight with several notable developments. The company's earnings and revenue performance have been strong, particularly in its general education segment, leading to a revised price target from BMO Capital Markets. BMO raised the price target to $82.00 from the previous $79.00, while maintaining an Outperform rating on the company's stock.

Additionally, Stride's stock rating was adjusted by a Citi analyst from Buy to Neutral, despite an increase in the price target for Stride's shares to $90 from the previous $77. This change was influenced by Stride's elevated near-term multiple compared to its educational technology peers and fiscal uncertainties.

Citi, however, maintains a positive view on the long-term fundamentals of Virtual Schools and Stride's position within this market. BMO Capital also shows optimism regarding Stride's future performance, as application numbers are surpassing those of the previous year, hinting at potential growth in future enrollments. These recent developments reflect the ongoing analysis and expectations of both BMO Capital and Citi for Stride Inc.'s performance.

InvestingPro Insights

Stride, Inc. (NYSE:LRN) has shown a strong financial performance in the recent periods, as reflected by the company's robust revenue growth and profitability metrics. According to InvestingPro data, the company has experienced an 11.03% revenue growth in the last twelve months as of Q4 2024, coupled with a significant EBITDA growth of 31.11%. This financial growth is complemented by a high return on assets of 11.09%, indicating efficient use of company resources.

Investors tracking the stock's performance will note that Stride’s share price has seen a substantial increase, as evidenced by a 105.82% one-year total return, signaling strong investor confidence. This performance aligns with InvestingPro Tips that highlight the company's ability to generate high returns over various time frames, including the last year and month. Moreover, Stride's current P/E ratio of 16.64 suggests that the stock is trading at a reasonable valuation relative to its near-term earnings growth, which could be an attractive point for value investors.

For those seeking more detailed analysis, InvestingPro offers additional tips on Stride, Inc., including insights into the company's cash position and liquidity, as well as future profitability predictions. There are a total of 14 additional InvestingPro Tips available for Stride, Inc., which can be found at: https://www.investing.com/pro/LRN. These tips may provide investors with a more comprehensive understanding of the company's financial health and investment potential.

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