The Zacks Schools industry, which includes for-profit education providers, is expected to see a gradually improving outlook through 2026, driven by demand for applied and career-oriented education in fields like healthcare and IT. The industry’s recovery is contingent on policy support, such as the Workforce Pell initiative passed in July 2025, aimed at expanding financial aid eligibility for short-term job-focused programs starting July 2026. Industry stocks like McGraw Hill, Strategic Education, Lincoln Educational Services, and American Public Education are positioned to benefit from these trends.
Despite growth prospects, the industry faces challenges including declining enrollment from a shrinking traditional student base, competitive pressures from public institutions, and rising operational costs tied to compliance and technology investments. The industry’s current price-to-earnings (P/E) ratio stands at 12.08X, significantly lower than the S&P 500’s 21.95X, highlighting affordability concerns amid rising costs.
In terms of stock performance, the Zacks Schools industry has decreased by 2.1% over the past year, slightly outperforming the broader Consumer Discretionary sector but lagging behind the S&P 500, which increased by 31.6%. Key industry players like American Public Education have reported strong growth, with earnings expected to rise by 75% in 2026, while Strategic Education has shifted focus to more scalable offerings to address margin pressures.
5 Stocks Our Experts Predict Could Double In the Next Year
By submitting your email, you'll also get a free pivot & flow membership. A free daily market overview. You can unsubscribe at any time.
