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Laureate Education Inc (LAUR)
NASDAQ:LAUR
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Laureate Education
(NASDAQ:LAUR)
74Outperform
Positive Factors
Growth Potential
LAUR is well poised for future growth and has an attractive financial model and capital allocation methodology.
Market Position
Management noted LAUR has the #1 brand in Peru and the #2 brand in Mexico within the private sector.
Negative Factors
Foreign Exchange Impact
Revenue and adjusted EBITDA guidance negatively impacted by 700bps of f/x headwind due to the volatility in Mexico.
Laureate Education (LAUR) vs. S&P 500 (SPY)
Market Cap
$2.88B
Dividend YieldN/A
Average Volume (3M)841.80K
Price to Earnings (P/E)9.8
Beta (1Y)0.56
Revenue Growth5.55%
EPS Growth185.01%
CountryUS
Employees31,800
SectorConsumer Defensive
Sector Strength79
IndustryEducation
Share Statistics
EPS (TTM)1.94
Shares Outstanding150,784,850
10 Day Avg. Volume974,337
30 Day Avg. Volume841,801
Financial Highlights & Ratios
PEG Ratio0.05
Price to Book (P/B)N/A
Price to Sales (P/S)1.84
Price to Cash Flow (P/CF)17.70
P/FCF Ratio16.50
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$22.83Price Target Upside21.82% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
Laureate Education Business Overview & Revenue Model
Company DescriptionLaureate Education, Inc. is a leading provider of higher education in Latin America, offering undergraduate and graduate degree programs primarily in the fields of business, engineering, health sciences, law, and education. The company operates a network of higher education institutions across Mexico and Peru, focusing on delivering high-quality, accessible, and affordable education to students.
How the Company Makes MoneyLaureate Education generates revenue primarily through tuition and fees collected from students enrolled in its degree programs. The company operates on a semester or quarterly academic calendar, and tuition varies by program, institution, and geographic location. In addition to tuition, Laureate may earn revenue from other educational services, such as continuing education courses, certifications, and language programs. Strategic partnerships with employers and government entities can also contribute to its earnings by facilitating student enrollment through sponsored programs or financial aid arrangements. The company's focus on operational efficiency and scalability in its institutions helps maintain profitability while expanding access to education in its target markets.
Laureate Education Financial Statement Overview
Summary
Laureate Education demonstrates strong profitability with increasing revenue and healthy profit margins. The balance sheet is stable, reflecting manageable leverage and effective use of equity. Cash flow management shows potential for improvement, particularly in free cash flow growth.Income Statement
Laureate Education shows a strong growth trajectory with a significant increase in revenue from 2023 to 2024. The gross profit margin is healthy, and the net profit margin has improved notably, reflecting enhanced profitability. EBIT and EBITDA margins are also robust, indicating efficient operational management. However, the revenue growth rate, while positive, suggests the need for sustained growth to maintain competitive advantage.76
Positive
Balance Sheet
The company's balance sheet is stable with a moderate debt-to-equity ratio, indicating manageable leverage. The return on equity is strong, showcasing effective use of shareholder funds. The equity ratio is satisfactory, suggesting a balanced capital structure. Though liabilities have decreased, further reduction could enhance financial stability.72
Positive
Cash Flow
Operating cash flow to net income ratio is strong, indicating good cash generation from operations. However, the free cash flow growth rate is negative, reflecting challenges in maintaining cash reserves. The free cash flow to net income ratio is positive, suggesting efficient cash management despite the decrease in free cash flow.68
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.57B | 1.48B | 1.24B | 1.09B | 1.02B | Gross Profit |
| 419.72M | 394.51M | 334.90M | 272.20M | 222.40M | EBIT |
| 374.00M | 338.82M | 270.00M | 70.50M | 22.50M | EBITDA |
| 537.80M | 378.30M | 350.80M | 54.02M | -126.23M | Net Income Common Stockholders |
| 296.47M | 107.59M | 69.57M | -283.10M | -320.70M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 91.35M | 89.39M | 85.20M | 324.80M | 750.10M | Total Assets |
| 1.86B | 2.13B | 1.97B | 2.21B | 4.97B | Total Debt |
| 427.41M | 582.70M | 648.00M | 569.00M | 1.51B | Net Debt |
| 336.06M | 493.31M | 562.80M | 244.20M | 764.70M | Total Liabilities |
| 903.52M | 1.18B | 1.20B | 1.07B | 2.71B | Stockholders Equity |
| 959.55M | 950.07M | 774.40M | 1.14B | 2.26B |
| Cash Flow | Free Cash Flow | |||
| 160.85M | 194.34M | 125.40M | -206.20M | 184.90M | Operating Cash Flow |
| 232.73M | 250.78M | 178.20M | -155.80M | 259.50M | Investing Cash Flow |
| -57.50M | -51.92M | 30.30M | 2.04B | 587.50M | Financing Cash Flow |
| -166.90M | -201.89M | -461.60M | -2.68B | -272.70M |
Laureate Education Technical Analysis
Neutral
18.74
Price Trends
19.16
Negative
18.53
Positive
16.87
Positive
Market Momentum
-0.04
Positive
38.79
Neutral
15.05
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LAUR, the sentiment is Neutral. The current price of 18.74 is below the 20-day moving average (MA) of 19.73, below the 50-day MA of 19.16, and above the 200-day MA of 16.87, indicating a neutral trend. The MACD of -0.04 indicates Positive momentum. The RSI at 38.79 is Neutral, neither overbought nor oversold. The STOCH value of 15.05 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for LAUR.
Laureate Education Risk Analysis
Laureate Education disclosed 35 risk factors in its most recent earnings report. Laureate Education reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Laureate Education Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $3.49B | 17.46 | 14.63% | ― | 12.83% | 97.16% | |
75 Outperform | $5.21B | 19.99 | 22.95% | ― | 13.13% | 56.75% | |
74 Outperform | $2.88B | 9.83 | 30.98% | ― | 5.55% | 185.01% | |
70 Outperform | $4.83B | 21.72 | 30.13% | ― | 7.50% | 13.70% | |
68 Neutral | $1.96B | 17.65 | 6.80% | 2.91% | 7.68% | 61.28% | |
67 Neutral | $414.80M | 42.39 | 5.41% | ― | 4.00% | ― | |
63 Neutral | $20.77B | 13.59 | -10.67% | 7.41% | 1.48% | 9.07% |
* Consumer Defensive Sector Average
Performance Comparison
LAUR
Laureate Education
18.74
5.09
37.29%
APEI
American Public Education
21.83
9.03
70.55%
ATGE
Adtalem Global Education
95.27
45.28
90.58%
LOPE
Grand Canyon Education
168.57
35.60
26.77%
LRN
Stride
120.03
58.11
93.85%
STRA
Strategic Education
79.91
-20.32
-20.27%
Laureate Education Earnings Call Summary
Earnings Call Date: Feb 20, 2025 | % Change Since: -6.86% | Next Earnings Date: May 1, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong financial and operational performance, including record-high margins, robust enrollment growth, and significant academic recognition. However, challenges such as foreign currency translation impacts and economic headwinds in Peru were noted. The company's strong position and strategic initiatives indicate a positive outlook despite these challenges.Highlights
Record High Adjusted EBITDA Margin
Achieved a new historic high adjusted EBITDA margin of 28.7% for 2024, with organic constant currency growth of 7% in revenue and 9% in adjusted EBITDA.
Strong Enrollment Growth
Both new and total enrollments increased by 5% for the year 2024, with notable growth in fully online programs.
Recognition for Academic Excellence
All universities in Mexico and Peru achieved a five-star rating from QSR, with UPC in Peru ranked as the number one education brand for the fourth consecutive year.
Expansion in Health Sciences
Opened six new medical schools, two dental schools, and one veterinary school in 2024, enhancing the health sciences portfolio.
Capital Returns to Shareholders
Returned over $100 million of capital to shareholders in 2024 and maintained a net debt-free position, with a strong balance sheet.
Lowlights
Foreign Currency Translation Headwinds
Anticipated significant foreign currency translation headwinds in 2025 due to volatility in the Mexican peso, impacting reported revenue.
Challenges in Peru
Adjusted EBITDA in Peru decreased by 1% for 2024 due to higher bad debt and economic challenges from a prior recession.
One-time Revenue Loss in Mexico
Expected a one-time revenue loss of $13 million in 2025 due to campus consolidation initiatives.
Company Guidance
During the call, Laureate Education provided guidance for the fiscal year 2025, highlighting anticipated growth and financial metrics. The company expects total enrollments to range between 489,000 and 495,000 students, reflecting a 4% to 5% increase from 2024. Revenue is projected to be between $1.545 billion and $1.570 billion, indicating a flat to slightly down performance on an as-reported basis but a 6% to 7% growth on an organic constant currency basis. Adjusted EBITDA is expected to range from $467 million to $477 million, representing a 4% to 6% increase on an as-reported basis and 11% to 13% in constant currency terms. Notably, adjusted EBITDA margins are anticipated to improve by approximately 150 basis points, driven by revenue growth, campus consolidations in Mexico, and reduced corporate expenses. Despite geopolitical uncertainties in Mexico, the company remains cautiously optimistic, projecting strong local currency revenue growth and margin expansion efforts, while also forecasting an adjusted EBITDA to unlevered free cash flow conversion of about 50%.Laureate Education Corporate Events
Financial Disclosures
Laureate Education Reports 2024 Financial Results
Positive
Feb 20, 2025
On February 20, 2025, Laureate Education reported its financial results for the fourth quarter and full-year 2024, highlighting a 3% revenue increase in Q4 and a 6% annual increase. The company saw significant growth in net income driven by changes in foreign exchange rates and higher operating income. Looking ahead to 2025, Laureate anticipates continued growth opportunities despite potential foreign currency translation challenges due to the weakening Mexican Peso.
Executive/Board Changes
Laureate Education Amends CEO Compensation Agreement
Neutral
Dec 13, 2024
Laureate Education, Inc. has amended its employment agreement with CEO Eilif Serck-Hanssen, establishing a $1,000,000 annual base salary and a 130% target bonus of the salary, starting January 1, 2025. Additionally, the agreement includes a $5,000,000 equity grant with specific vesting conditions and a long-term incentive equity grant equating to 350% of base salary annually, reinforcing the company’s commitment to its leadership and potentially impacting its operational stability and executive retention.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.