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Enrollment Drop, Compliance Allegations Fuel Stride (LRN) Shareholder Lawsuit – Hagens Berman

1. Stride, Inc. faces a class action lawsuit over operational failures. 2. The lawsuit claims inflated enrollment figures and compliance violations. 3. Sales growth forecast for 2026 revised down to 5% from 19% average. 4. Higher dropout rates and low conversion rates reported, impacting enrollments significantly. 5. Investors are encouraged to report losses for potential legal claims.

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FAQ

Why Very Bearish?

The lawsuit reveals critical operational failures affecting investor trust, similar to past cases like those of Enron and WorldCom, which had catastrophic effects on stock prices due to similar fraud allegations.

How important is it?

The lawsuit's implications for compliance and management integrity are likely to sway investor confidence significantly, making it a critical event for LRN.

Why Short Term?

Immediate market reaction is likely negative, as seen in past securities fraud cases, which often lead to swift declines in stock prices upon news disclosures.

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TALCOOLEDUC
SAN FRANCISCO, Nov. 13, 2025 (GLOBE NEWSWIRE) -- Stride, Inc. (NYSE: LRN), one of the nation’s largest providers of online educational services, is now facing a securities class action lawsuit from shareholders after a series of disclosures revealed significant operational and compliance challenges, leading to a precipitous drop in its stock price. Prominent shareholder rights law firm Hagens Berman is actively investigating the alleged legal claims against Stride and certain of its executives. The firm urges investors who suffered significant losses to submit your losses now. The firm also encourages persons with knowledge who may be able to assist in the investigation to contact its attorneys. Class Period: Oct. 22, 2024 – Oct. 28, 2025Lead Plaintiff Deadline: Jan. 12, 2026Visit: www.hbsslaw.com/investor-fraud/lrn Contact the Firm Now: LRN@hbsslaw.com | 844-916-0895  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; andWas 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. “We’re 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,” said Reed Kathrein, the Hagens Berman partner leading the investigation. If you invested in Stride and have substantial losses, or have knowledge that may assist the firm’s investigation, submit your losses now. If you’d like more information and answers to frequently asked questions about the Stride case and our investigation, read more. Whistleblowers: Persons with non-public information regarding Stride should consider their options to help in the investigation or take advantage of the SEC Whistleblower program. Under the new 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, call Reed Kathrein at 844-916-0895 or email LRN@hbsslaw.com. About Hagens BermanHagens Berman is a global plaintiffs’ rights complex litigation firm focusing on corporate accountability. The firm is home to a robust practice and represents investors as well as whistleblowers, workers, consumers and others in cases achieving real results for those harmed by corporate negligence and other wrongdoings. Hagens Berman’s team has secured more than $2.9 billion in this area of law. More about the firm and its successes can be found at hbsslaw.com. Follow the firm for updates and news at @ClassActionLaw.  Contact: Reed Kathrein, 844-916-0895

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