Stride, Inc. (LRN) Securities Class Action

The litigation is focused on the propriety of Stride’s assurances that its business model is strong, its in-year enrollments is strong, and that it is “on track for another year of strong growth in FY ‘26.”  The case’s focus includes Stride’s assurances that it could fill the hole left by the enrollment loss when Gallup-McKinley canceled its contract with the company.

The complaint alleges that these and other assurances were false and misleading because, unknown to investors, Stride:

• Inflated enrollment numbers by retaining “ghost” students;
• Cut staffing costs by assigning teachers’ caseloads far beyond the statutory limits;
• Ignored compliance requirements, including background checks and licensure laws for its employees and ignored federally mandated special education services to students;
• Suppressed whistleblowers who documented financial directives by the company’s leadership to delay hirings and deny services to preserve profit margins; and
• Was losing existing and potential enrollments.

The complaint further alleges that investors began to learn the truth on September 14, 2025. That day, a report surfaced which revealed that Gallup-McKinley sued Stride alleging fraud, deceptive practices, and systematic legal violations that prioritized profits over student welfare. Gallup alleged Stride inflated student enrollments by including “ghost students” – those who never officially started or had been absent for at least ten consecutive days. Gallup also accused Stride of intentionally and illegally increasing student-to-teacher ratios, employing insufficiently licensed teachers, and unlawful business practices for the sole purpose of inflating its stock values.

Then, on October 28, 2025, Stride announced that “poor customer experience” resulted in “higher withdrawal rates,” “lower conversion rates,” and had driven students away. The company estimated that the impact was 10,000 to 15,000 fewer enrollments.

The most significant concern for investors was Stride’s guidance for 2026, forecasting sales growth of only 5%. This is a stark slowdown from the company's annualized sales growth of 19% over the last five years and has prompted the market to take a sharply cautious stance.

FREQUENTLY ASKED QUESTIONS ABOUT THE CASE

What is the LRN investigation about?

We are investigating the extent to which company leadership was aware of the alleged operational and compliance deficiencies before the public disclosures, and whether the alleged misrepresentations and omissions constitute securities fraud.

WHAT SHOULD I DO?

I worked at LRN. What should I do?

If you were an employee of LRN, you may have valuable information that could be relevant to the investigation. Hagens Berman is one of the nation’s top whistleblower law firms, and has successfully represented many individuals who come forward with information regarding corporate malfeasance. Under the new SEC Whistleblower program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, contact Reed Kathrein at 844-916-0895 or LRN@hbsslaw.com.

There are multiple law firms participating, do I need to contact all of them?

No, you do not need to contact all participating law firms. Generally, class-action investigations and lawsuits are consolidated into a single case to streamline the legal process, and attorneys from only a few law firms are selected to serve in a leadership role on the consolidated case. Hagens Berman has a proven track record of being appointed to leadership roles in complex, multidistrict litigation regarding investor fraud and other consumer rights issues, and your claim will be handled by attorneys who have helped secure approximately $325 billion in class-action settlements on behalf of individuals who have suffered due to corporate malfeasance and the wrongdoing of other powerful institutions.

AM I ELIGIBLE?

What is the threshold amount to be eligible? What are “substantial” losses?

The threshold amount and the definition of "substantial" losses may vary depending on a number of factors specific to the case, including the size of the company, market cap, shares outstanding and who holds them and the damages alleged by the fraud. In general, to be eligible to participate in a class-action lawsuit, you must be able to demonstrate that you suffered financial losses as a result of the alleged wrongdoing and that your losses meet the criteria set by the court or law firm. Fill out the form and submit your losses.

CAN I PARTICIPATE?

Am I affected? What do I need to do to participate?

If you were an investor in LRN, you may be affected and eligible to participate in the case. To determine your eligibility and potential involvement, fill out the form and submit your losses.

Can any LRN investor participate?

In most class-action investigations and cases, any investor who meets the eligibility criteria, including purchasing the shares during the relevant period, can participate, regardless of the size of their investment. Fill out the form to find out your rights.

I bought on a non-U.S. Exchange. Can I participate?

No. This investigation only covers shares bought on a U.S. exchange, i.e. NASDAQ or NYSE. Fill out the form to find out your rights.

Am I included if I still hold my shares, or do I need to sell to participate?

Participation is based on purchasing shares during the relevant period, rather than your current holdings. Accordingly, you do not need to sell to participate. Fill out the form to find out your rights.