Laureate Education (LAUR) AI Stock Analysis

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Laureate Education

(NASDAQ:LAUR)

74Outperform

Laureate Education's strong financial performance, robust technical indicators, and positive earnings call outlook collectively contribute to a favorable stock assessment. Key strengths include profitability growth and strategic initiatives, while challenges like cash flow and currency headwinds need monitoring.

Positive Factors

Growth Prospects

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

Financial Performance

Revenue and adjusted EBITDA guidance negatively impacted by 700bps of f/x headwind due to the volatility in Mexico.

Investment Outlook

Mexico's outlook is more conservative given a pullback in investment indirectly impacting consumers.

Laureate Education (LAUR) vs. S&P 500 (SPY)

Market Cap

$2.87B

Dividend YieldN/A

Average Volume (3M)963.99K

Price to Earnings (P/E)9.9

Beta (1Y)0.56

Revenue Growth5.55%

EPS Growth185.01%

CountryUS

Employees31,800

SectorConsumer Defensive

Sector Strength94

IndustryEducation & Training Services

Share Statistics

EPS (TTM)1.94

Shares Outstanding150,784,850

10 Day Avg. Volume1,088,437

30 Day Avg. Volume963,994

Financial Highlights & Ratios

PEG Ratio0.05

Price to Book (P/B)N/A

Price to Sales (P/S)1.86

Price to Cash Flow (P/CF)17.90

P/FCF Ratio16.70

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$22.83

Price Target Upside19.22% 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

Positive

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.

Balance Sheet

Positive

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.

Cash Flow

Positive

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.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
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

Technical Analysis Sentiment

Negative

Last Price19.15

Price Trends

50DMA

19.63

Negative

100DMA

19.15

Negative

200DMA

17.39

Positive

Market Momentum

MACD

0.30

Negative

RSI

64.95

Neutral

STOCH

85.29

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LAUR, the sentiment is Negative. The current price of 19.15 is below the 20-day moving average (MA) of 19.72, below the 50-day MA of 19.63, and above the 200-day MA of 17.39, indicating a neutral trend. The MACD of 0.30 indicates Negative momentum. The RSI at 64.95 is Neutral, neither overbought nor oversold. The STOCH value of 85.29 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LAUR.

Laureate Education Risk Analysis

Laureate Education disclosed 36 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
ATGE	82 Outperform	$3.97B	19.16	14.63%	―	12.83%	97.16%
PRDO	78 Outperform	$1.73B	11.94	16.39%	1.91%	-4.05%	1.50%
LAUR	74 Outperform	$2.87B	9.86	30.98%	―	5.55%	185.01%
LOPE	72 Outperform	$5.00B	22.01	30.13%	―	7.50%	13.70%
UTI	72 Outperform	$1.50B	27.67	21.41%	―	14.70%	275.89%
STRA	68 Neutral	$1.94B	16.85	6.80%	3.05%	7.68%	61.28%
Sector *	63 Neutral	$20.53B	14.04	-16.01%	3.27%	1.30%	4.55%

* Consumer Defensive Sector Average

Performance Comparison

LAUR

Laureate Education

19.15

4.80

33.45%

PRDO

Perdoceo Education

25.82

9.06

54.06%

ATGE

Adtalem Global Education

103.78

57.52

124.34%

LOPE

Grand Canyon Education

172.40

41.70

31.91%

STRA

Strategic Education

77.79

-18.24

-18.99%

UTI

Universal Technical Institute

26.78

11.82

79.01%

Laureate Education Earnings Call Summary

Earnings Call Date: Feb 20, 2025 | % Change Since: -4.82% | 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.

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.