8 Best Education Software for January 2026
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Market Overview & Selection Criteria
The current market presents opportunities in undervalued stocks, particularly within education software and related technology sectors, where many companies show strong intrinsic value potential despite recent 1Y declines. Value Sense selected these 8 stock picks using its proprietary quality ratings, intrinsic value calculations, and key financial metrics like ROIC, FCF margins, and revenue growth. Criteria focused on companies with quality ratings above 4.5, favorable intrinsic values relative to market caps, and exposure to education software themes, as curated from platform watchlists. This methodology highlights undervalued stocks trading below their estimated worth, ideal for value-oriented analysis.
Featured Stock Analysis
Stock #1: Constellation Brands, Inc. (STZ)
| Metric | Value |
|---|---|
| Market Cap | $24.8B |
| Quality Rating | 5.7 |
| Intrinsic Value | $97.2 |
| 1Y Return | -36.2% |
| Revenue | $9,623.5M |
| Free Cash Flow | $518.3M |
| Revenue Growth | (5.6%) |
| FCF margin | 5.4% |
| Gross margin | 51.7% |
| ROIC | 20.4% |
| Total Debt to Equity | 3.2% |
Investment Thesis
Constellation Brands, Inc. (STZ) stands out with a Quality rating of 5.7 and an intrinsic value of $97.2, suggesting potential undervaluation in the consumer staples sector adjacent to growth themes. Despite a -36.2% 1Y return, the company maintains solid fundamentals including $9,623.5M in revenue, $518.3M free cash flow, and a healthy 51.7% gross margin. ROIC at 20.4% reflects efficient capital use, while low total debt to equity of 3.2% provides financial stability amid revenue contraction of 5.6%. This positions STZ as an educational case for resilient margins in volatile markets.
Key financials underscore steady cash generation with a 5.4% FCF margin, making it a watchlist candidate for investors analyzing quality amid sector shifts.
Key Catalysts
- Strong ROIC of 20.4% indicating superior capital efficiency
- High gross margin at 51.7% supporting profitability
- Minimal debt to equity 3.2% enabling flexibility
Risk Factors
- Negative revenue growth of 5.6% signaling demand challenges
- Significant 1Y return decline of -36.2% reflecting market pressures
Stock #2: Tyler Technologies, Inc. (TYL)
| Metric | Value |
|---|---|
| Market Cap | $18.9B |
| Quality Rating | 6.1 |
| Intrinsic Value | $533.8 |
| 1Y Return | -24.2% |
| Revenue | $2,298.3M |
| Free Cash Flow | $618.9M |
| Revenue Growth | 10.6% |
| FCF margin | 26.9% |
| Gross margin | 44.8% |
| ROIC | 7.0% |
| Total Debt to Equity | 18.7% |
Investment Thesis
Tyler Technologies, Inc. (TYL), with a Quality rating of 6.1 and intrinsic value of $533.8, offers compelling value in government software solutions. Market cap stands at $18.9B, supported by $2,298.3M revenue and robust $618.9M free cash flow. Positive revenue growth of 10.6% and an impressive 26.9% FCF margin highlight operational strength, complemented by 44.8% gross margin and 7.0% ROIC. Despite a -24.2% 1Y return, moderate debt to equity at 18.7% suggests balanced risk for long-term analysis in tech infrastructure.
This profile makes TYL a key pick for examining high-margin software scalability.
Key Catalysts
- Excellent FCF margin of 26.9% driving cash efficiency
- Positive revenue growth at 10.6% indicating expansion
- Solid gross margin of 44.8% for profitability
Risk Factors
- 1Y return drop of -24.2% amid broader market trends
- Debt to equity at 18.7% requiring monitoring
Stock #3: Blackbaud, Inc. (BLKB)
| Metric | Value |
|---|---|
| Market Cap | $2,911.8M |
| Quality Rating | 6.6 |
| Intrinsic Value | $6,587.0 |
| 1Y Return | -19.3% |
| Revenue | $282.0B |
| Free Cash Flow | $276.1M |
| Revenue Growth | 24,461.1% |
| FCF margin | 0.1% |
| Gross margin | 59.6% |
| ROIC | 4,571.7% |
| Total Debt to Equity | 984.0% |
Investment Thesis
Blackbaud, Inc. (BLKB) earns a high Quality rating of 6.6 and extraordinary intrinsic value of $6,587.0, positioning it as a standout in nonprofit software. With $2,911.8M market cap, it reports $282.0B revenue, $276.1M free cash flow, and explosive 24,461.1% revenue growth. Metrics include 59.6% gross margin, exceptional 4,571.7% ROIC, though FCF margin is low at 0.1% and debt to equity high at 984.0%. 1Y return of -19.3% contrasts with growth potential, ideal for studying high-ROIC outliers.
Key Catalysts
- Massive revenue growth of 24,461.1% signaling hyper-scaling
- Exceptional ROIC at 4,571.7% for capital returns
- Strong gross margin of 59.6%
Risk Factors
- Elevated debt to equity of 984.0% posing leverage risks
- Low FCF margin 0.1% despite revenue scale
- Recent 1Y return decline of -19.3%
Stock #4: Stride, Inc. (LRN)
| Metric | Value |
|---|---|
| Market Cap | $2,819.2M |
| Quality Rating | 7.4 |
| Intrinsic Value | $113.0 |
| 1Y Return | -39.2% |
| Revenue | $2,475.1M |
| Free Cash Flow | $390.2M |
| Revenue Growth | 17.3% |
| FCF margin | 15.8% |
| Gross margin | 39.2% |
| ROIC | 26.0% |
| Total Debt to Equity | 45.4% |
Investment Thesis
Stride, Inc. (LRN) boasts the highest Quality rating at 7.4 and intrinsic value of $113.0, with $2,819.2M market cap in education technology. Key metrics feature $2,475.1M revenue, $390.2M free cash flow, 17.3% revenue growth, and 15.8% FCF margin. Gross margin at 39.2%, ROIC 26.0%, and debt to equity 45.4% support a strong profile, even with -39.2% 1Y return. This makes LRN a prime example for analyzing growth in online learning sectors.
Key Catalysts
- Top Quality rating of 7.4
- Robust ROIC 26.0% and revenue growth 17.3%
- Healthy FCF margin 15.8%
Risk Factors
- Sharp 1Y return fall of -39.2%
- Debt to equity at 45.4%
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Stock #5: Youdao, Inc. (DAO)
| Metric | Value |
|---|---|
| Market Cap | $1,295.5M |
| Quality Rating | 5.9 |
| Intrinsic Value | $7.0 |
| 1Y Return | 57.4% |
| Revenue | CN¥5,675.6M |
| Free Cash Flow | CN¥0.0 |
| Revenue Growth | (1.6%) |
| FCF margin | 0.0% |
| Gross margin | 44.9% |
| ROIC | 25.0% |
| Total Debt to Equity | N/A |
Investment Thesis
Youdao, Inc. (DAO), rated 5.9 in quality with $7.0 intrinsic value, has $1,295.5M market cap and CN¥5,675.6M revenue. It shows positive 57.4% 1Y return, 44.9% gross margin, 25.0% ROIC, but CN¥0.0 free cash flow, 1.6% revenue growth, and 0.0% FCF margin. N/A debt to equity adds intrigue for international edtech analysis.
Key Catalysts
- Positive 1Y return of 57.4%
- Strong ROIC 25.0% and gross margin 44.9%
Risk Factors
- Zero free cash flow and FCF margin
- Revenue decline of 1.6%
Stock #6: Docebo Inc. (DCBO)
| Metric | Value |
|---|---|
| Market Cap | $658.3M |
| Quality Rating | 6.5 |
| Intrinsic Value | $27.5 |
| 1Y Return | -50.5% |
| Revenue | $236.0M |
| Free Cash Flow | $28.3M |
| Revenue Growth | 13.0% |
| FCF margin | 12.0% |
| Gross margin | 80.4% |
| ROIC | 70.0% |
| Total Debt to Equity | 6.4% |
Investment Thesis
Docebo Inc. (DCBO) features 6.5 Quality rating, $27.5 intrinsic value, and $658.3M market cap. Metrics include $236.0M revenue, $28.3M free cash flow, 13.0% revenue growth, 12.0% FCF margin, standout 80.4% gross margin, 70.0% ROIC, and low 6.4% debt to equity. -50.5% 1Y return highlights volatility in learning management systems.
Key Catalysts
- Exceptional gross margin 80.4% and ROIC 70.0%
- Revenue growth of 13.0%
Risk Factors
- 1Y return drop of -50.5%
- Smaller market cap exposure
Stock #7: Skillsoft Corp. (SKIL)
| Metric | Value |
|---|---|
| Market Cap | $77.9M |
| Quality Rating | 4.8 |
| Intrinsic Value | $101.9 |
| 1Y Return | -64.6% |
| Revenue | $515.8M |
| Free Cash Flow | $6,210.0K |
| Revenue Growth | (3.6%) |
| FCF margin | 1.2% |
| Gross margin | 80.1% |
| ROIC | (9.6%) |
| Total Debt to Equity | 208.2% |
Investment Thesis
Skillsoft Corp. (SKIL) has 4.8 Quality rating, $101.9 intrinsic value, $77.9M market cap, $515.8M revenue, $6,210.0K free cash flow, 3.6% revenue growth, 1.2% FCF margin, 80.1% gross margin, negative 9.6% ROIC, and 208.2% debt to equity. -64.6% 1Y return suits high-risk educational content analysis.
Key Catalysts
- High gross margin 80.1%
- Attractive intrinsic value upside
Risk Factors
- Negative ROIC -9.6% and revenue growth
- High debt to equity 208.2% and 1Y decline
Stock #8: zSpace, Inc. (ZSPC)
| Metric | Value |
|---|---|
| Market Cap | $12.5M |
| Quality Rating | 5.4 |
| Intrinsic Value | $7.2 |
| 1Y Return | -95.8% |
| Revenue | $31.5M |
| Free Cash Flow | ($19.1M) |
| Revenue Growth | (24.2%) |
| FCF margin | (60.5%) |
| Gross margin | 45.5% |
| ROIC | (950.6%) |
| Total Debt to Equity | (55.7%) |
Investment Thesis
zSpace, Inc. (ZSPC) rates 5.4 in quality with $7.2 intrinsic value and micro $12.5M market cap. It shows $31.5M revenue, negative $19.1M free cash flow, 24.2% revenue growth, 60.5% FCF margin, 45.5% gross margin, deeply negative 950.6% ROIC, and 55.7% debt to equity. Extreme -95.8% 1Y return flags it for speculative edtech AR/VR studies.
Key Catalysts
- Potential in niche education tech
- Gross margin stability at 45.5%
Risk Factors
- Severe revenue decline 24.2% and negative FCF
- Poor ROIC -950.6% and 1Y return
Portfolio Diversification Insights
These 8 stock picks cluster heavily in education software and tech, with STZ adding consumer diversification, TYL and BLKB in enterprise/government software, LRN/DCEO/DAO/SKILL/ZSPC in pure edtech. Sector allocation: ~75% education/tech, 25% staples/software infrastructure. High ROIC names like LRN 26.0% and DCBO 70.0% balance lower ones like ZSPC, while varying market caps ($12.5M-$24.8B) enable size diversification. Pair high-growth (BLKB) with stable margins (STZ) for reduced volatility in a watchlist.
Market Timing & Entry Strategies
Consider positions during sector rotations toward education tech amid digital learning trends, targeting dips below intrinsic values like TYL's $533.8. Use Value Sense screeners for entry when ROIC exceeds 15% and FCF margins improve. Dollar-cost average into higher quality (e.g., LRN 7.4 rating) over 3-6 months, monitoring revenue growth rebounds from negatives like STZ's 5.6%.
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FAQ Section
How were these stocks selected?
These 8 best stock picks were chosen using Value Sense criteria like quality ratings above 4.5, intrinsic value potential, ROIC, and education software themes from curated watchlists.
What's the best stock from this list?
Stride, Inc. (LRN) leads with the highest Quality rating of 7.4, strong 26.0% ROIC, and 17.3% revenue growth, making it a top educational pick.
Should I buy all these stocks or diversify?
Diversify across sizes and subsectors like edtech (LRN, DCBO) and software (TYL, BLKB) to balance risks, rather than concentrating in all.
What are the biggest risks with these picks?
Key risks include negative revenue growth (e.g., STZ -5.6%), high debt (BLKB 984.0%), and 1Y declines averaging ~ -50%, plus FCF challenges in smaller caps like ZSPC.
When is the best time to invest in these stocks?
Optimal timing aligns with market dips below intrinsic values, positive revenue inflection, or edtech catalysts, using Value Sense backtesting for historical patterns.