Now is the time to buy shares of online education stock Stride , Morgan Stanley said. Analyst Greg Parrish upgraded the virtual K-12 education provider to overweight from equal weight, saying in a note to clients that investors are underappreciating the growth potential and risk-reward for the stock. “We see the recent pullback in shares following 4FQ earnings as an attractive entry point, and recent data points and commentary give us conviction that virtual education penetration is structurally higher than pre-COVID,” he said. According to Parrish, Stride remains the leading provider of virtual education in the United States. The company’s rapidly expanding career learning business should also see continued success given its focus on an underpenetrated market. Virtual learning got a boost during the pandemic, but Parrish believes interest should persist as more parents continue to search for flexible work or students willingly opt-in. “We do not believe the current penetration of 1.1% will return to pre-pandemic levels, and think further upside could be possible over time, though we do not build this into our base case,” he said. Morgan Stanley maintained its $45 price target on the stock, which implies a nearly 27% upside from Wednesday’s close. Stride shares are up 6.5% this year. — CNBC’s Michael Bloom contributed reporting
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