Jim Cramer Put These 14 Stocks Under the Microscope

11. Stride, Inc. (NYSE:LRN)

Number of Hedge Fund Holders: 36

Whilst Cramer acknowledged that Stride, Inc. (NYSE:LRN) has performed well, he highlighted that the stock’s high valuation has gotten “harder to justify.”

“Lately, we’ve been hearing [that]… skilled trades will be growing a lot versus jobs that require a standard college education. Stride is like an arms dealer for the people who want those positions. I love that business right now… The bull case for this one, simple. Public school satisfaction has been dwindling for years, and parents are increasingly willing to enroll their kids in entirely online schools if it means they can get a decent education… It’s hard to deny the momentum that Stride’s seeing in their business. Now, after opening up shop 25 years ago, the company has since expanded their schools and service offerings to 91 schools in 31 states in their general education market and 56 schools or programs in 27 states in their career learning market. Not bad…

Stride reported the latest in a string of beat and raise quarters, which is part of the reason why this stock is the 18th best performer in the S&P 1500 year to date and the eighth best performing in the S&P 600 with a return of over 47%… So, where do I come down on this one? Look, even though Stride’s seen some strong momentum lately, there’s still a good amount of competition in this space…

The scale of the opportunity here might be enormous enough that there’s room for everybody. However, given that the stock’s already run more than 47% for the year, you know what I think the valuation, it’s gotten harder to justify [don’t buy, don’t buy, don’t buy]. Plus, all the competition in the space makes it harder to decipher what advantage Stride has over its rivals. Make it difficult to recommend it for a big run. I’m not going to do that.”

Stride (NYSE:LRN) provides online education tools, courses, and services that support personalized learning from kindergarten through high school. The company also offers career-focused programs and operates private schools.