Does “Ghost Student” Fraud Allegations Upend Stride’s Reported Enrollment Story And Change The Bull Case For Stride (LRN)?

Simply Wall St.12-19 13:18

In recent months, multiple law firms have filed securities class action lawsuits against Stride, Inc., alleging inflated enrollment figures using “ghost students,” compliance failures, and suppression...

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These coordinated legal actions focus sharply on whether Stride’s reported enrollment metrics and operational practices accurately reflected the health and integrity of its underlying business. Next, we’ll examine how these fraud allegations around “ghost students” could reshape Stride’s investment narrative and future risk profile. This technology could replace computers: discover 28 stocks that are working to make quantum computing a reality.Stride Investment Narrative RecapTo own Stride today, you need to believe its online and hybrid education model can keep converting demand into sustained enrollment and earnings, despite tighter scrutiny. The new “ghost student” fraud allegations make data integrity and regulatory relationships the central near term catalyst and the biggest risk, as any adverse legal findings or contract losses could matter far more in the short run than incremental growth initiatives. The most relevant recent announcement here is the wave of securities class actions, including the Scott+Scott case filed in November 2025, which directly challenges Stride’s reported enrollment and compliance practices. Until there is more clarity on these legal outcomes, the prior earnings driven narrative and consensus catalysts sit alongside a materially higher risk that contract partners or regulators reassess their ties with Stride. Yet investors should be aware that, if public sentiment shifts further against online education quality and oversight, Stride’s exposure to contract loss and reputational risk... Read the full narrative on Stride (it's free!)Stride's narrative projects $3.1 billion revenue and $523.9 million earnings by 2028. This implies 9.3% yearly revenue growth and an earnings increase of about $236 million from $287.9 million today.Uncover how Stride's forecasts yield a $115.50 fair value, a 76% upside to its current price.Exploring Other PerspectivesLRN 1-Year Stock Price Chart Seven members of the Simply Wall St Community currently see Stride’s fair value between US$105 and about US$342 per share, showing very different expectations. You should weigh those views against the emerging legal and compliance overhang, which could influence how reliably Stride converts enrollment relationships into future earnings.Explore 7 other fair value estimates on Stride - why the stock might be worth just $105.00!Build Your Own Stride NarrativeDisagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.A great starting point for your Stride research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.Our free Stride research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Stride's overall financial health at a glance.Want Some Alternatives?The market won't wait. These fast-moving stocks are hot now. Grab the list before they run:We've found 13 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.Rare earth metals are an input to most high-tech devices, military and defence systems and electric vehicles. The global race is on to secure supply of these critical minerals. Beat the pack to uncover the 35 best rare earth metal stocks of the very few that mine this essential strategic resource.Uncover the next big thing with financially sound penny stocks that balance risk and reward.  This article by Simply Wall St is general in nature. We provide commentary based on historical data\n    and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your\n    financial situation. We aim to bring you long-term focused analysis driven by fundamental data.\n    Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.\n    Simply Wall St has no position in any stocks mentioned.The New Payments ETF Is Live on NASDAQ:Money is moving to real-time rails, and a newly listed ETF now gives investors direct exposure. Fast settlement. Institutional custody. Simple access.Explore how this launch could reshape portfoliosSponsored ContentNew: Manage All Your Stock Portfolios in One PlaceWe've created the ultimate portfolio companion for stock investors, and it's free.• Connect an unlimited number of Portfolios and see your total in one currency• Be alerted to new Warning Signs or Risks via email or mobile• Track the Fair Value of your stocksTry a Demo Portfolio for FreeHave feedback on this article? Concerned about the content? Get in touch with us directly. 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