Laureate Education, Inc. (LAUR): what the price assumes

Generated: 2026-07-29 · Exported: 2026-08-01 · Source: https://boothcheck.com/report/LAUR

Headline

Field	Value
Ticker	LAUR
Company	Laureate Education, Inc.
Current price	$38.39/sh
Composition	Mexico 52% / Peru 48% / Corporate 0%

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

Field	Value
Inversion basis	whole-company
Operating margin (value-band context)	5.7%
Operating margin today	24.0%
Margin compression (value-band)	-18.3pp
Implied growth	-2.1%
Multiple paid	14x operating income

The operating-margin figure is value-band context at year 12: derived from the framework's value band, a separate calculation — not part of the priced-in solve.

Solve inputs: computed at a 7.9% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~6.3pp.

Reconcile: at the x-ray's 9.3% required return this reads ~6.3%/yr; the models below use their own rates.

How unusual the bet is: within-range

Reference	Value
vs own history	+0.46σ
cohort percentile (of 212 peers)	32
implied end-window share	0%

Valuation X-Ray

The price is justified by relative-multiple and growth-DCF; asset-based/earnings-power land below the price.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

Family	Median price/FV	Models	Reads
Asset	1.51x	4	expensive
Earnings	2.35x	5	expensive
Relative	1.22x	3	expensive
Growth	0.74x	3	justifies

Families that justify the price: Relative, Growth Families that call it expensive: Asset, Earnings

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.3%); the inversion above states its own rate.

Per-Model Detail (n=15)

Model	Family	FV	Price/FV	Applicable	Methodology
DCF Perpetual Growth	Growth	$58.14	0.66x	yes	FCF base $0.3B, growth 14% (input: historical growth), terminal g 4.0%, WACC 8.3%, 6yr projection
DCF Exit Multiple	Growth	$51.83	0.74x	yes	Exit EV/EBITDA: 12.3x / 14.3x / 16.3x (bear / base = today's held flat / bull), 6yr
Relative Valuation	Relative	$35.94	1.07x	yes	P/E 18x (static sector reference · 2026-04), scenarios: 14.9x / 18.0x / 21.1x (bear / base = reference held flat / bull), EV/EBITDA 12x
Simple DDM	Growth	—	—	no	—
Two-Stage DDM	Growth	—	—	no	—
Simple Excess Return	Asset	$21.24	1.81x	yes	BV/sh $7.37, ROE (TTM) 26.6%, ke 9.3%
Two-Stage Excess Return	Asset	$36.51	1.05x	yes	5yr excess ROE then converge to ke=9.3%
Discounted Future Market Cap	Growth	$37.20	1.03x	yes	Rev $1.7B, growth 14% (input: historical growth; tapered), Terminal P/S: 2.6x / 3.1x / 3.7x (bear / base = today's held flat / bull, cap 8x)
Growth-Adjusted P/E	Relative	—	—	no	—
Margin Trajectory	Growth	—	—	no	—
Earnings Power Value	Earnings	$16.35	2.35x	yes	Normalized EBIT (5y avg op income, one-time charges added back) $0.30B × (1−21%) / WACC 8.3% → EPV (no growth)
Residual Income	Asset	$31.76	1.21x	yes	BV $7.37 + 5yr PV of (ROE (TTM) 26.6% − Kₑ 9.3%) × BV; BV grows 8.8%/yr
Graham Number	Asset	$17.61	2.18x	yes	√(22.5 × EPS $1.87 × BVPS $7.37) — Graham's conservative floor
EV/EBITDA Relative	Relative	$31.56	1.22x	yes	EBITDA $0.42B × sector EV/EBITDA 12.0x
FCF Yield	Earnings	$16.44	2.33x	yes	FCF $263.6M / Kₑ 9.3% — zero-growth perpetuity
SBC-Adj FCF Yield	Earnings	$15.41	2.49x	yes	SBC-adj FCF $0.25B (FCF $0.26B − SBC $0.01B) capitalized at Kₑ
Ben Graham Formula	Earnings	$8.62	4.45x	yes	EPS $1.87 × (8.5 + 2×-1.5%) × (4.4 / 5.3%)
ROIC-Justified P/B	Asset	—	—	no	—
P/Sales Sector	Relative	$30.54	1.26x	yes	Revenue $1.74B × sector P/S 2.5x
PEG Fair Value	Relative	—	—	no	—
Earnings Yield	Earnings	$20.22	1.90x	yes	EPS $1.87 / required return 9.3% (Rf 4.3% + ERP 5.0%)
Funds From Operations Multiple	Relative	—	—	no	—
Clinical Phase NPV	Growth	—	—	no	—
Merton	Asset	—	—	no	—
V5 Mechanical	—	—	—	no	—

Solvency

Field	Value
Net debt	$123.2m
Net debt / NOPAT (after-tax)	0.37x
Net debt / operating income (pre-tax)	0.30x
Interest coverage	36.4x
Share count CAGR (buyback)	-5.4%
Burning cash	no

Bullet Takeaways

• Laureate is a focused two-country higher-education operator, Mexico and Peru in roughly even weight, and its flagship Mexican university alone enrolls about 132,200 students per the latest 10-K, giving it scale in markets where public capacity is capped.
• The business runs at a 24% operating margin and the share count has fallen about 5% a year, but it carries modest net debt and earns most of its money in two emerging-market currencies, so a peso or sol move can swing reported results.
• Enrollment is the metric that matters, and the next read is the academic-cycle intake; new enrollments rose 9% in the most recent quarter, the clearest signal of whether the growth the price assumes is being delivered.

Bull Case

Where the price lands against the methods is the most encouraging thing about Laureate, because for once they broadly agree. The forward-growth methods, the relative multiples, and the asset-and-profitability lens all cluster close to the current price rather than miles below it. Only the strictest zero-growth earnings-power read calls it expensive, and a company growing enrollment in two underpenetrated markets should not be valued as if it will never grow again. That clustering tells you the market is paying for plausible expansion, not a fantasy.

The business underneath is a genuine franchise. Laureate's flagship Universidad del Valle de México enrolls about 132,200 students and is, in the company's own filing, "Ranked Top 5 university in Mexico" with a five-star QS rating for employability. That is brand equity in a market the company describes as one where "public institutions tend to be less expensive, if not free, but limited in capacity". The constraint on free public education is the entire opportunity: every qualified 18-to-24-year-old who cannot get a public seat is a potential private student, and Laureate has the scaled, accredited brand to capture them. New enrollments grew 9% and total enrollments 6% in the most recent quarter, so the demand is showing up in the numbers, not just the thesis.

Capital allocation reinforces the case. The operating margin sits at 24%, interest coverage is comfortable at more than thirty times, and net debt is only about a third of a year's operating income, so the balance sheet is not the bet. Management has been retiring stock, with the share count down about 5% a year, which means each remaining share owns a growing slice of a growing business. A profitable, cash-generative education operator buying back its own equity while enrollment compounds is the unglamorous version of a good outcome, and the price is not asking for heroics to get there.

Bear Case

The competitive ground under Laureate is more crowded than its top-five branding suggests. The company itself describes higher education in Mexico and Peru as "highly fragmented and marked by large numbers of local competitors" chasing the same 18-to-24-year-old demographic. On one side sit public universities that are "less expensive, if not free"; on the other, a long tail of lower-priced private operators. Laureate competes by being better-known and better-ranked, but that is a position it has to keep paying to defend through campuses, faculty, and program updates, and the filing concedes the risk of failing to add programs "as quickly as required by prospective students and employers or as quickly as our competitors begin offering similar programs". Online-first challengers can move faster on exactly that axis. Peer operators in the sector warn of the same pressure from "competitors with lower p riced programs", which is the disruption vector here: price and speed, not prestige.

The macro and currency exposure compounds it. Both segments earn in emerging-market currencies, and the most recent quarter showed the gap starkly: revenue rose 15% as reported but only about 1% in constant currency, with the difference largely translation. A stronger dollar quietly erodes the reported growth the price is paying for, and neither the peso nor the sol is the analyst's choice for stability. Laureate also flags that it "may not be able to maintain or accelerate the current growth rate, effectively manage expanding operations or building new campuses", which is the execution risk of a capacity-led growth model.

On valuation, the price assumes company-wide operating profit grows about 13.6% a year for five years, against a recent pace it has roughly matched but a track record that shows only about 47% of comparable fast-growers held it that long. The earnings-power methods, which credit no growth, sit well below today's price, so if enrollment growth fades or currency keeps eating the constant-currency line, the multiple compresses toward those lower reads. The downside is bounded by real profits and a manageable balance sheet, but the upside is paying for growth that history sustains only about half the time.

Valuation

The price is making a contained bet, not a heroic one. At today's quote the market pays roughly 26 times company-wide operating income, which works out to operating profit growing about 13.6% a year for five years. That is close to the pace Laureate has recently delivered, and against the historical record only about 47% of comparable fast-growers sustained a rate like it for five years. So the assumption is demanding but not exotic; the question is durability rather than a leap of faith.

What makes the read comfortable is that the methods broadly converge near the price. The relative-multiple lens, sitting at a sector price-to-earnings of about 18 times, lands almost exactly at the current price. The forward-growth methods, crediting next-period enrollment expansion, reach it as well. The asset-and-profitability methods, which capitalize a 26.6% return on equity off a $7.37 book value per share, also land near today's price once that excess return is carried forward. The methods that say expensive are the zero-growth earnings-power reads, which capitalize free cash flow with no growth at all and therefore land far below; for a company still growing enrollment, that is the wrong lens, and the spread between it and the others IS the growth premium the market is paying. It is a moderate one.

Solvency does not threaten the thesis and does not flatter it either. Laureate carries about $123 million of net debt against $417 million of trailing operating income, leverage of roughly a third of a year, with interest covered more than thirty times. The company is not burning cash, and the share count has fallen about 5% a year, so capital return is real and visible. The genuine downside variable is not the balance sheet but the currency: most of the profit is earned in pesos and soles, and a translation swing can move reported results more than enrollment does, as the gap between 15% reported and 1% constant-currency revenue in the latest quarter showed.

Catalysts

The first quarter of 2026 kept the growth story intact. New enrollments rose 9% and total enrollments 6%, with revenue up 15% as reported to $272.6 million, though only about 1% in constant currency after roughly $9 million of intra-year academic-calendar timing. The enrollment momentum was led by Peru, where new enrollments grew 13% on rapid online expansion, while Mexico grew new enrollments 4% under more moderate economic conditions.

Management set 2026 full-year guidance at revenue of $1.89 to $1.91 billion and adjusted EBITDA of $583 to $593 million, with enrollment expected to grow about 4.2% for the year. The second quarter, which captures the larger southern-hemisphere academic intake, is guided to revenue of $597 to $601 million. The company also pointed to first-quarter share repurchases as a use of its cash flow, consistent with the falling share count.

The next real test is the seasonal enrollment cycle landing in line with the 4.2% full-year target, because that figure is what underwrites the growth the price assumes. The currency line is the offset to watch alongside it: enrollment can grow as guided while a weaker peso or sol holds back the reported, dollar-denominated result.

Peer Cohorts (Per Segment, With Filing Citations)

Core business (reported)

• LOPE (Grand Canyon Education, Inc.)
• FY2025 10-K: …adverse impact on our future growth. We face competition from established and other emerging companies, which could divert university partners to our competitors, result in pricing pressure and significantly reduce our revenue. We expect existing competitors and new entrants to the educational services market to…
• FY2025 10-K: …develop new degree programs often delivered online, has historically been characterized by a full-service, revenue-sharing model, based on the premise that most traditional institutions are not only operationally unprepared to offer these programs at scale but also are not equipped to make the significant upfront…
• STRA (Strategic Education, Inc.)
• FY2025 10-K: …learning modalities, we face increasing competition for students from traditional colleges, including colleges with well-established reputations for excellence and colleges in states that offer various forms of "free college" programs. As online learning matures as a modality for education delivery across higher…
• FY2025 10-K: …is highly competitive and online education is subject to rapid technological change. We compete with traditional public and private two-year and four-year colleges, many of which have some form of online education programs, other for-profit schools, vocational education organizations, and other alternatives to higher…
• PRDO (Perdoceo Education Corporation)
• FY2025 10-K: …operations, such as the 90-10 Rule and GE. We have experienced increased competition as more postsecondary education providers increase their online program offerings (in particular programs that are geared towards the needs of working adults), including traditional and community colleges that had not previously…
• FY2025 10-K: …facing the for-profit postsecondary education industry may make it difficult to retain key personnel, in particular long-tenured senior officers. Loss of key personnel in the future could impact our growth, lead to changes in or create uncertainty about our business strategies or otherwise impact management's…
• UTI (UNIVERSAL TECHNICAL INSTITUTE, INC)
• FY2025 10-K: …Title IV funding, including not-for-profit public and private schools, community colleges and for-profit institutions which offer programs similar to ours. Our competition differs in each market depending on the curriculum we offer and the availability of other choices, including job prospects. Other competitive…
• FY2025 10-K: …Competition is generally based on location, tuition rates, the type of programs offered, the quality of instruction and instructional facilities, graduate employment rates, reputation and recruiting. Additionally, the military often recruits or retains potential students when branches of the military offer enlistment…
• LRN (Stride, Inc.)
• FY2025 10-K: …In addition, some of our school-as-a-service offerings could seek to transition to a self-managed school by inviting competitive alternatives to portions of the products and services now provided entirely by us under our integrated fully managed service agreements. If we are unable to successfully compete for new…
• FY2025 10-K: …schools is inadequate, our opportunities for growth and our ability to sustain our revenues, results of operations and financial condition would be adversely affected. Increasing competition in the education industry sectors that we serve could lead to pricing pressures, reduced operating margins, loss of market…
• TAL (TAL Education Group)
• (no filing in the citation store)
• AFYA (AFYA LIMITED)
• FY2025 20-F: …to more lenient criteria, which may facilitate their entry into and accelerated expansion within the educational market. As a result, we may face increased competitive pressure, which could directly affect our ability to attract students, maintain operating margins, and sustain our competitive position in the sector.…
• FY2025 20-F: …the year ended December 31, 2024, which, in turn, represented an increase of 4.1% from R$8,460 for the year ended December 31, 2023. Our strategy of combining organic expansion and selective acquisitions has supported consistent growth and profitability over recent years, as further discussed in "Item 5. Operating…
• GHC (GRAHAM HOLDINGS CO)
• FY2025 10-K: …by Christopher J. Ourisman and his team of industry professionals. (6) Other segment items for each reportable segment include: (a) Education (includes Kaplan International, Kaplan Higher Education and Kaplan Supplemental Education) - training and employment expense, travel meals and entertainment expense, operating…
• FY2025 10-K: …revenue. (5) Management and operating services provided by Christopher J. Ourisman and his team of industry professionals. (6) Other segment items for each reportable segment include: (a) Education (includes Kaplan International, Kaplan Higher Education and Kaplan Supplemental Education) - training and employment…

Methodology Note

• Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
• Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
• Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
• Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.

Sources

Laureate Q1 2026 earnings release, May 2026 · Laureate Q1 2026 earnings call, May 2026