Reassessing The Changing Outlook For K12 Inc. (LRN)


Dimensional Fund Advisors LP recently announced the acquisition of new stake in K12 Inc. (NYSE:LRN). The institutional investor has increased its shareholding in the Consumer Defensive company by 3.85% to 3.42 million shares with purchase of 0.13 million shares. This fresh investment now brings its stake to 8.34% valued currently at $156.59 million. In addition, Renaissance Technologies LLC raised its holdings by 0.41 million to 2.2 million shares. And Fuller & Thaler Asset Management,.. has lifted its position by 0.34% or 5570.0 shares – to 1.63 million shares.

With over 1.35 million K12 Inc. (LRN) shares trading Tuesday and a closing price of $43.57 on the day, the dollar volume was approximately $58.84 million. The shares have shown a negative weekly performance of -1.63% and its price on 08/25/20 gained nearly 7.26%. Currently, there are 39.64M common shares owned by the public and among those 38.02M shares have been available to trade.

An analysis of what Wall Street brokers have to say about the expected price targets for this stock gives us this picture: 5 analysts who have offered their price forecasts for LRN have a consensus price objective of $48.50. The analysts have set the share’s price value over the next 12 months at a high of $60.00 and a low of $34.00 should the stock experience a downside. Incidentally, analysts’ outlook for the K12 Inc. stock is 1.20 for the next 12 months. The average price target is -42.06% below its last price level and a downside to the estimated low will see the stock lose -28.15% over that period. But an upside of 27.38% will see the stock hit the forecast high price target while mean target price for the stock is $50.00.

Insiders at the company have transacted a total of 69 times over the past 12 months, according to data filed with the U.S. Securities and Exchange Commission (SEC). 21 of these insider trades were purchases, accounting for 1,145,541 shares. Insider sales of the common stock occurred on 48 occasions, with total insider shares sold totaling 1,042,569 shares.

The top 3 mutual fund holders in K12 Inc. are Capitol Series Trust – Fuller & T, Vanguard Total Stock Market Index, and DFA US Small Cap Value Portfolio. Capitol Series Trust – Fuller & T owns 1.53 million shares of the company’s stock, all valued at over $69.83 million. Vanguard Total Stock Market Index sold 1277.0 shares to see its total holdings shrink to 1.09 million shares valued at over $50.03 million and representing 2.67% of the shares outstanding. DFA US Small Cap Value Portfolio bought 92447.0 shares to bring its total holdings to over 1.03 million shares at a value of $46.97 million. DFA US Small Cap Value Portfolio now owns shares totaling to 2.50% of the shares outstanding.

Shares of K12 Inc. (NYSE: LRN) opened at $40.43, down -$0.19 from a prior closing price of $40.62. However, the script later closed the day at $43.57, up 7.26%. The company’s stock has a 5-day price change of -1.63% and 79.89% over the past three months. LRN shares are trading 114.10% year to date (YTD), with the 12-month market performance up to 57.52% higher. It has a 12-month low price of $15.06 and touched a high of $52.84 over the same period. Currently, 1.35 million shares have been traded, compared to an average intraday trading volume of 1.35 million shares. The stock is trading above its simple moving averages at the SMA20, SMA50, and SMA200, as the current price level is off by -5.52%, 11.54%, and 73.08% respectively.

Institutional ownership of K12 Inc. (NYSE: LRN) shares accounts for 91.30% of the company’s 39.64M shares outstanding. Mutual fund holders own 44.96%, while other institutional holders and individual stakeholders account for 46.38% and 39.52% respectively.

It has a market capitalization of $1.85B and a beta (3y monthly) value of 0.47. The stock’s trailing 12-month PE ratio is 72.02, while the earnings-per-share (ttm) stands at $0.61. The company has a PEG of 3.60 and a Quick Ratio of 1.70 with the debt-to-equity ratio at 0.17. Price movements for the stock have been influenced by the stock’s volatility, which stands at 4.99% over the week and 6.66% over the month.

Analysts forecast that K12 Inc. (LRN) will achieve an EPS of $K12 Inc for the current quarter, $43.55 for the next quarter and $Stocks for Type. The lowest estimate earnings-per-share for the quarter is $Lennar Corporation while analysts give the company a high EPS estimate of $LTRN. Comparatively, EPS for the current quarter was $Aileron Therapeutics, Inc. a year ago. Earnings per share for the fiscal year are expected to decrease by -33.70%, and 30.23% over the next financial year. EPS should grow at an annualized rate of 20.00% over the next five years, compared to 15.60% over the past 5-year period.

If you are looking to buy this stock, then you may note that the average analyst recommendation by 5 brokerage firm advisors rate K12 Inc. (LRN) as a “Strong Buy” at a consensus score of 1.20. Specifically, 4 Wall Street analysts polled rate the stock as a buy, while 1 of the 5 advise that investors “hold,” and 0 rated it as a “Sell.”

Looking at the support for the LRN, a number of firms have released research notes about the stock. Barrington Research stated their Outperform rating for the stock in a research note on August 12, 2020, with the firm’s price target at $30-$60. Sidoti coverage for the K12 Inc. (LRN) stock in a research note released on July 09, 2020 offered a Neutral rating with a price target of $34. William Blair was of a view on August 12, 2019 that the stock is Outperform, while Sidoti gave the stock Buy rating on August 07, 2019, issuing a price target of. Barrington Research on their part issued Outperform rating on January 23, 2019.


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