The Zacks Schools industry is rebounding, fueled by rising demand for career-focused programs in healthcare, skilled trades, cybersecurity, and IT. These institutions are benefiting from a labor market that values job-ready skills and government initiatives promoting non-degree pathways. The sector is also addressing the critical shortage of healthcare workers with rigorous, workforce-aligned training. Digital innovation is driving differentiation, with companies heavily investing in adaptive learning tools and scalable online platforms. This tech integration enhances engagement and supports flexible learning for working adults, while helping institutions manage costs and protect margins. Consolidation is also reshaping the landscape, as larger players pursue acquisitions to broaden offerings and improve scale. The “Big Beautiful Bill” appears incremental, not disruptive—pushing policy toward affordability and outcomes via Workforce Pell, higher employer TA caps, and added military TA. Providers with job-linked offerings, disciplined pricing, and diversified funding are best positioned.

Although regulatory scrutiny, affordability concerns, and funding dependency remain challenges, demographic tailwinds (especially among older and minority learners), state/federal support for vocational education, and digital innovation are combining to drive enrollment and revenue growth for for-profit providers in 2025 like Stride, Inc. (LRN Quick QuoteLRN - Free Report) , Grand Canyon Education, Inc. (LOPE Quick QuoteLOPE - Free Report) , Laureate Education, Inc. (LAUR Quick QuoteLAUR - Free Report) , Perdoceo Education Corporation (PRDO Quick QuotePRDO - Free Report) , Lincoln Educational Services Corporation (LINC Quick QuoteLINC - Free Report) .

Industry Description

The Zacks Schools industry comprises for-profit education companies that offer undergraduate, graduate and specialized programs in finance, accounting, analytics, marketing, healthcare, business and technology. They are engaged in offering career-oriented programs in the fields of business and management, nursing, computer science, engineering, information systems and technology, project management, cybersecurity and criminal justice. The industry players also offer child-care services and career-oriented post-secondary courses. Some companies within the industry also provide yoga classes and yoga-related retail merchandise-integrated fitness classes, along with conducting workshops and teacher training programs.

3 Trends Shaping the Future of the School Industry

Rising Demand for Workforce-Oriented Programs: After years of declining enrollment, 2025 is witnessing renewed interest in programs that offer direct pathways to employment. For-profit institutions have used their flexible operating models to expand offerings in short-term credential programs, healthcare training, cybersecurity, and skilled trades. As the labor market places greater value on job-ready skills over traditional degrees, these programs are gaining traction, especially among adult learners and career switchers. Government workforce development initiatives, such as reskilling grants and federal partnerships to promote non-degree pathways, have also boosted demand. Additionally, the ongoing digital transformation across sectors has spurred interest in IT boot camps and tech-aligned certifications, areas where for-profit providers have built a scalable presence.

Meanwhile, healthcare and global institutions have been making substantial contributions to the companies' financial success. The U.S. healthcare sector is presently grappling with a pronounced shortage of skilled professionals, which is posing a significant risk to the quality of care and exacerbating health disparities across the country. The companies have designed their programs to be rigorous and well-suited to address the workforce needs of the healthcare industry. Industry stakeholders also anticipate a future where the demand for healthcare professionals will outstrip the available supply.

Amid the pressures of regulation and shifting demographics, the sector is witnessing consolidation. Larger, better-capitalized players are acquiring niche or financially weaker institutions to expand program offerings or gain regional accreditation. Strategic’s STRA acquisition of tech bootcamps and Adtalem’s ATGE continued integration of Walden University highlight ongoing M&A activity aimed at diversification and scale. Meanwhile, Congress passed “Workforce Pell” in July 2025, expanding Pell eligibility to high-quality, short-term programs beginning July 1, 2026. For providers with accredited, outcomes-verified certificates in healthcare, IT, and skilled trades, this expands the addressable market and could structurally lift enrollment and pricing power, subject to program-quality metrics.

Online Education and Tech Integration Drive Market Differentiation: The acceleration of digital learning continues to be a critical differentiator for for-profit colleges. Institutions like Grand Canyon Education, Strategic Education, and Adtalem have invested heavily in learning management systems, data analytics, and adaptive learning tools to personalize instruction and enhance student engagement. The shift toward hybrid and asynchronous formats has allowed for-profit players to serve non-traditional and working students more effectively than many public institutions. Scalable digital platforms have also helped manage operating costs, enabling some companies to maintain or improve margins despite enrollment challenges.

Affordability, Operational & Financial Challenges: Affordability remains a core concern for prospective students, especially with interest in student loan reform gaining momentum. While income-driven repayment plans and forgiveness initiatives may ease financial stress for borrowers, they also highlight systemic cost concerns associated with for-profit programs.

For-profit educators face several operational and financial headwinds. Most of their revenues come from tuition and federal aid, so they are vulnerable to any enrollment swings or cuts in government funding. Any dip in student numbers (due to competition, demographic trends or economic cycles) can quickly hit operating income. Compliance and administrative costs are also high, as schools must meet strict reporting and quality standards under Title IV. FAFSA processing challenges continue into 2025, prompting late disbursement flexibilities and straining working capital for institutions reliant on Title IV funding cycles. Ongoing operational delays early in the year disrupted receivables timing, while new FVT/GE reporting requirements add compliance burdens and may drive adjustments to program portfolios.

Industry players also often spend heavily on recruitment and advertising to attract students, squeezing margins. Again, macroeconomic factors (like rising interest rates or budget cuts at the state/local level) can constrain school and district purchasing of edtech products, indirectly pressuring vendors’ top lines.

Zacks Industry Rank Indicates Bright Prospects

The Zacks Schools industry is an 18-stock group within the broader Zacks Consumer Discretionary sector. The industry currently carries a Zacks Industry Rank #32, which places it in the top 13% of more than 250 Zacks industries.

The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates impressive near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.

The industry’s positioning in the top 50% of the Zacks-ranked industries is a result of a higher earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are gradually gaining confidence in this group’s earnings growth potential. Since April 2025, the industry’s earnings estimates for 2025 have increased to $1.34 per share from $1.32.

Before we present a few stocks that you may want to consider for your portfolio, let’s take a look at the industry’s recent stock-market performance and valuation picture.

Industry Lags Sector, Outperforms S&P 500

The Zacks Schools industry has lagged the broader Zacks Consumer Discretionary sector but performed better than the Zacks S&P 500 Composite over the past year.

The stocks in this industry have collectively gained 20.6% compared with the broader sector’s rise of 26.6%. Meanwhile, the S&P 500 has increased 16.2% in the said period.

One-Year Price Performance

Industry's Current Valuation

On the basis of the forward 12-month price-to-earnings ratio, which is a commonly used multiple for valuing for-profit education stocks, the industry is currently trading at 15.32X versus the S&P 500’s 22.76X and the sector’s 20.44X.

Over the past five years, the industry has traded as high as 217.18X, as low as 13.28X and at a median of 20.89X, as the chart below shows.

Industry’s P/E Ratio (Forward 12-Month) Versus S&P 500

Industry’s P/E Ratio (Forward 12-Month) Versus Sector

5 School Stocks to Buy Now

Below, we have discussed five stocks from the industry that currently carry a Zacks Rank #1 (Strong Buy) or 2 (Buy) and have solid growth potential. You can see the complete list of today’s Zacks #1 Rank stocks here.

Grand Canyon: Based in Phoenix, AZ, Grand Canyon operates as an education services company in the United States. Grand Canyon’s performance is being driven by broad-based enrollment growth and execution across its online, hybrid and ground models. Online remains the engine: total online enrollment rose about 10% in second-quarter 2025 as GCE kept rolling out more than 20 new programs annually, deepened ties with more than 5,500 employers to address workforce shortages, improved retention, and held tuition, pulling in more 18–25-year-olds choosing fully online study across 300 or more programs. Hybrid momentum is accelerating, with enrollment up mid-teens excluding closed/teach-out sites, fueled by an “advanced standing” funnel that channels students through affordable eight-week online prerequisites into high-completion, about 90% first-time NCLEX pass-rate cohorts. Service revenue increased on the back of higher partner enrollments, including GCU online and off-campus labs, with mix and contract changes modestly lowering revenue per student but not derailing growth. Overall, management sees little to no negative impact from recent federal policy (“Big Beautiful Bill”), citing low tuition levels and strong graduate earnings in nursing—an external backdrop that supports continued execution.

Grand Canyon stock — currently sporting a Zacks Rank #1 — has surged 42.1% over the past year. Grand Canyon has seen an upward estimate revision for 2025 earnings to $9.07 per share from $8.75 over the past 30 days. This company’s earnings for 2025 are expected to register 12.8% growth from a year ago. LOPE’s earnings topped consensus estimates in all the trailing four quarters, with the average surprise being 4%. Moreover, LOPE’s three-to-five-year expected earnings per share growth rate is currently pegged at 15%. It also has a favorable VGM Score of B, making it a potentially interesting investment opportunity.

Price and Consensus: LOPE

Laureate Education: Headquartered in Miami, FL, this company operates five higher education institutions across Mexico and Peru. Laureate is driving growth in 2025 through its locally rooted but digitally scalable model, resilient demand in Mexico and Peru, and focus on affordability and employability. Strong enrollment momentum, especially in fully online working-adult programs, along with disciplined pricing and efficiency gains, is boosting profitability. Currency tailwinds, cost controls, and a higher outlook further strengthen results. New campuses in Monterrey and Lima, plus a pipeline of expansions, position the company to capture rising demand. Its strong brands, digital capabilities, and favorable macro and regulatory backdrops in Latin America continue to support its trajectory.

Laureate stock — currently carrying a Zacks Rank #2 — has rallied 76.6% over the past year. LAUR has seen an upward estimate revision for 2025 earnings to $1.73 per share from $1.70 over the past 30 days. This company’s earnings for 2025 are expected to register 28.2% growth from a year ago.

Price and Consensus: LAUR

Stride: Headquartered in Reston, VA, Stride is a technology-driven education services provider with a well-diversified portfolio of learning programs. Stride’s momentum is being powered by secular growth in school-choice demand, with strong application activity translating into robust enrollments and rising brand awareness amplified by word-of-mouth at a national scale. A generally supportive funding backdrop at the state level, with no material federal headwinds expected, underpins reliable revenue per student. Management is also leaning into product innovation—most notably high-dosage reading tutoring for early grades, continued build-out of career-learning pathways, and a cautious but ambitious integration of AI—to improve student outcomes and engagement. Operational discipline and scale are delivering efficiency gains even as the company reinvests, while the franchise’s resilience with partners—illustrated by quickly backfilling a terminated New Mexico relationship through new multi-district agreements that kept families and teachers in the ecosystem—supports durable growth.

Stride stock — currently carrying a Zacks Rank #2 — has surged 107.8% over the past year. LRN has seen an upward estimate revision for fiscal 2026 earnings to $8.52 per share from $7.76 over the past 30 days. This company’s earnings for fiscal 2026 are expected to register 5.2% growth from a year ago. LRN’s earnings topped the consensus estimate in three of the trailing four quarters and missed in one, with the average surprise being 98.7%. Moreover, LRN’s three-to-five-year expected earnings per share growth rate is currently pegged at 20%. It also has a favorable VGM Score of A.

Price and Consensus: LRN

Lincoln Educational Services: Based in Parsippany, NJ, Lincoln’s momentum is being driven by rising interest in skilled-trades training as a practical alternative to four-year degrees, supported by recent federal actions around student loans; a program mix concentrated in fields with persistent labor shortages (electrical, HVAC, automotive, welding and nursing); the Lincoln 10.0 hybrid model that increases student flexibility while improving instructional and space efficiency; strong execution at new and relocated campuses alongside rapid replication of high-demand programs; deeper high-school pipelines and expanding employer partnerships (including Johnson Controls) that bolster enrollments and outcomes; improved marketing efficiency with healthier credit performance; and a visible expansion runway—Levittown and Houston progressing, Hicksville planned, and additional campuses envisioned—funded by operating cash flow, with healthcare offerings being restructured under new leadership and degree-granting efforts aimed at enabling RN pathways.

Lincoln, carrying a Zacks Rank #2, has surged 59.5% over the past year. It has seen an upward estimate revision for the 2025 earnings estimate to 67 cents per share from 63 cents over the past 30 days. LINC’s earnings for 2025 are expected to grow 19.6%. Its earnings topped consensus estimates in three of the trailing four quarters and missed on one occasion, with the average surprise being 74.1%. Moreover, LINC’s three-to-five-year expected earnings per share growth rate is currently pegged at 15%. It also has a favorable VGM Score of A.

Price and Consensus: LINC

Perdoceo Education: Headquartered in Schaumburg, IL, this company offers postsecondary education programs through online, campus-based and blended learning formats across the United States. Perdoceo’s growth is being fueled by strong enrollment momentum across CTU, AIU and the newly acquired University of St. Augustine, supported by high student retention and rising interest from prospects. Management is enhancing marketing and admissions productivity, using generative AI selectively, while also expanding corporate-student programs for steadier demand. The St. Augustine deal adds meaningful scale with hybrid and health-science programs driving consistent gains. Investments in technology, analytics, academics and support systems are improving outcomes and capacity, while AIU’s extra December session is set to boost year-end enrollment and extend momentum into 2026.

Perdoceo, carrying a Zacks Rank #2, has soared 44.7% over the past year. It has seen an upward estimate revision for the 2025 earnings estimate to $2.52 per share from $2.49 over the past 30 days. This company’s earnings for 2025 are expected to grow 10%. Its earnings topped the consensus estimate in each of the trailing four quarters, with the average surprise being 6.2%. Moreover, PRDO’s three-to-five-year expected earnings per share growth rate is currently pegged at 15%. It also has a favorable VGM Score of B.

Price and Consensus: PRDO