Vertiv Holdings and Stride Learning broke out, then diverged early Wednesday after posting double-digit gains following their respective earnings reports.
Vertiv Earnings
Data center and communications network leader Vertiv reported a 126% increase in adjusted earnings to 52 cents per share. Revenue jumped 17.7% to 1.743 billion.
Analysts polled by FactSet expected earnings of 44 cents per share on $1.75 billion in revenue.
The results mark four consecutive quarters of triple-digit earnings growth and a six quarter streak of double-digit revenue gains.
The Columbus, Ohio-based company provides IT components and maintenance services for data centers, cloud networks and commercial and industrial customers. Vertiv manufactures power and thermal management devices, as well as hardware and software for data center equipment. It also offers a range of preventive maintenance, testing, training and monitoring services.
Third quarter orders rose 11% and Vertiv reported a record backlog of $5 billion. Organic net sales grew 17% for the quarter.
In the report, Vertiv CEO Giordano Albertazzi said the industry is preparing to deploy data center infrastructure necessary to meet the demands of artificial intelligence. "Vertiv is uniquely positioned to partner with our customers to meet their data center needs for the present and the future," he said.
Vertiv guided Q4 net sales to range between $1.828 billion and $1.854 billion on 10.7% to 12.2% organic sales growth. The company expects Q4 earnings between 48 cents and 52 cents per share.
Vertiv guided FY23 earnings between $1.69 and $1.73 per share, compared to 53 cents per share last year. It sees full-year revenue between $6.826 billion and $6.851 billion.
FactSet analysts project 2023 earnings of $1.61 per share on $8.826 billion in revenue.
VRT stock leapt more than 7% at Wednesday's open, briefly topping a 40.41 buy point for a flat base. Shares then reversed sharply off the high, and pulled back below the buy point.
Vertiv stock surged 4.7% Tuesday to reclaim its 50-day moving average and 21-day exponential line.
Shares rallied nearly 173.6% through Wednesday's close.
Stride Learning
Stride Learning, formerly known as K12, offers one-one-one tutoring, career development training and K-12 programs and curriculums. The Virginia-based online learning company reported Q1 earnings of 11 cents per share, compared to a loss of 54 cents per share last year. Revenue jumped 12.9% to a first-quarter record of $480.2 million.
Analysts polled by FactSet expected a loss of 37 cents per share on $450.8 million.
Stride's earnings growth accelerated the last four quarters and it averaged 10.8% revenue growth over that time.
General education revenue increased 10.2% to $299.34 million. Career learning revenue jumped 17.8% to $180.84 million, driven by a 20.3% increase in revenue from middle and high school curriculums to $150.97 million.
The company's total enrollment increased 8.1% for the quarter to roughly 187,900. General education enrollment rose 4.7% to about 117,600.
For Q2, Stride expects adjusted operating income between $80 million to $90 million, up from $76 million last year. The company forecasts up to 7% second-quarter revenue growth to range from $490 and $510 million.
Stride sees fiscal 2024 revenue between $1.96 billion and $2.03 billion, compared to $1.84 billion for fiscal 2023. Full-year adjusted operating income was guided between $250 million and $275 million, improving from $201 million.
FactSet analysts project full-year adjusted operating income of $247 million on $1.98 billion in sales.
Stride Stock
LRN stock vaulted 17.8% Wednesday. Shares bounced off their 50-day line on Tuesday and rose 1.6%.
The gain sent Stride stock above a handful of possible buy points. Among those was a 45.48 entry in a 21-week cup base. Shares were well above the buy zone from that entry. But the gap-up nature of the stock's opening gain offered a breakaway gap buying opportunity.
Investors can put the move to use as a study example. But the stock market is currently in a correction, which means it is not a good time to purchase new stocks.
LRN stock rallied 67.7% in 2023 through Wednesday's close.
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