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Stride, Inc. (LRN) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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Stride, Inc. (LRN)

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Intrinsic Value (DCF)

Current$69.79
→
Intrinsic$319.44
+358%
$219.02$319.44$509.96
Market implies 1% growth for 5 years
DCF analysis suggests LRN could have 358% upside at 25% growth — verify assumptions match your view.
At $70, the market prices in only 1% growth — below historical 25%, suggesting low expectations.
Range: Bear $219 → Bull $510. Current price implies expectations below the bear case — very conservative expectations.
Discount ↓Growth →21%23%25%27%
8%$392$423$456$491
10%$276$297$319$343
12%$211$227$244$262
14%$171$183$196$210

Bull Case

  • Bull case ($510) offers 631% upside at 30% growth, 9% discount
  • Price below even worst-case scenario — strong margin of safety
  • Market-implied growth (1%) ≤ historical CAGR (25%)

Bear Case

  • Bear case ($219) with 20% growth, 12% discount rate
  • Using 25% growth — aggressive, watch for mean reversion
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5-Year Free Cash Flow Projection

Year 1$538.79M
Year 2$673.49M
Year 3$841.87M
Year 4$1.05B
Year 5$1.32B
Terminal$19.36B

📐 Model Inputs

Growth Rate25.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$431.04MTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

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Frequently Asked Questions

Is LRN stock undervalued or overvalued?
🟢 UNDERVALUED

LRN trades at $69.79 vs. our DCF-derived intrinsic value of $265.45, implying +288% upside. At a 10.0% WACC and 25.0% projected FCF growth, the market appears to be underpricing the present value of LRN's future cash flows. The bear case ($175.76) still suggests upside, providing margin of safety.

What is LRN's intrinsic value?

Using a 5-year DCF model: Base FCF of $431M, projected at 25.0% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 10.0% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $-233M net debt and dividing by 0.05B shares: Bear $175.76 | Base $265.45 | Bull $397.52. Current price $69.79 implies +288% to base case.

How is LRN's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 25.0% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=10.0%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($12.62B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 29.3x.