Laureate Education, Inc. (NASDAQ: LAUR)

Sector: Consumer Defensive Industry: Education & Training Services CIK: 0000912766
Market Cap 5.20 Bn
P/B 4.65
P/E 25.55
P/S 3.29
ROIC (Qtr) 12.35
Div Yield % 0.00
Rev 1y % (Qtr) 8.57
Total Debt (Qtr) 438.40 Mn
Debt/Equity (Qtr) 0.39
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About

Laureate Education, Inc. (LAUR) is a leading global provider of higher education, operating a portfolio of degree-granting institutions in Mexico and Peru. The company has established a strong presence in these regions, offering a range of undergraduate and graduate programs through its five institutions to a diverse student body of over 448,900 students. Laureate Education's primary business activities revolve around providing high-quality education in various fields such as medicine, engineering, and business. The company's main source of revenue...

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Investment thesis

Bull case

  • Strong operating cash flow of 313.50M provides robust 0.72x coverage of total debt 438.40M, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 246.45M provide 2.73x coverage of short-term debt 90.14M, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of 313.50M provides exceptional 148.44x coverage of minority interest expenses 2.11M, showing strong core operations.
  • Operating cash flow of 313.50M provides exceptional 27.38x coverage of interest expenses 11.45M, showing strong debt service capability.
  • Operating cash flow of 313.50M provides strong 29.93x coverage of stock compensation 10.47M, indicating sustainable incentive practices.

Bear case

  • Operating cash flow of 313.50M barely covers its investment activities of (62.77M), with a coverage ratio of -4.99, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 313.50M provides thin coverage of dividend payments of (455000) with a -689.01 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 246.45M provide limited coverage of acquisition spending of (4.27M), which is -57.68x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating cash flow of 313.50M barely covers operating expenses of (1.70M) with a -184.52 ratio, suggesting thin operational efficiency margins and limited flexibility.
  • High financing cash flow of (152.07M) relative to working capital of (88.87M), which is 1.71x suggests concerning dependence on external funding for operational needs.

Segments Breakdown of Revenue (2024)

Segments Breakdown of Revenue (2024)

Peer comparison

Companies in the Education & Training Services
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 EDU New Oriental Education & Technology Group Inc. 9.35 Bn 24.58 1.82 0.78 Bn
2 TAL TAL Education Group 6.18 Bn 22.22 2.20 0.38 Bn
3 GHC Graham Holdings Co 5.47 Bn 12.27 1.91 1.17 Bn
4 LAUR Laureate Education, Inc. 5.20 Bn 25.55 3.29 0.44 Bn
5 LOPE Grand Canyon Education, Inc. 4.62 Bn 21.85 4.23 0.11 Bn
6 LRN Stride, Inc. 3.61 Bn 11.32 1.43 0.56 Bn
7 ATGE Covista Inc. 3.46 Bn 13.66 1.83 0.73 Bn
8 PRDO PERDOCEO EDUCATION Corp 2.84 Bn 42.39 1.73 0.06 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 2.60 0.71
EV to Cash from Ops. EV/CFO 17.58 6.80
EV to Debt EV to Debt 12.57 11.15
EV to EBIT EV/EBIT 14.98 112.78
EV to EBITDA EV/EBITDA 11.44 6.48
EV to Free Cash Flow [EV/FCF] EV/FCF 21.61 5.57
EV to Market Cap EV to Market Cap 1.06 582,173.64
EV to Revenue EV/Rev 3.48 1.74
Price to Book Value [P/B] P/B 4.65 -3.80
Price to Earnings [P/E] P/E 25.55 -1.70
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 447.71 11.73
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 2.21
Dividend per Basic Share Div per Share (Qtr) 0.00 0.25
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 1.69
Interest Coverage Int. cover (Qtr) 32.14 53.05
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 4.04 -82.12
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 75.14 25.11
Dividend Growth (1y) % Div 1y % (Qtr) 0.00 0.54
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -18.35 -39.04
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 3.07 -34.79
EBIT Growth (1y) % EBIT 1y % (Qtr) -1.08 -40.70
EBT Growth (1y) % EBT 1y % (Qtr) 0.86 -52.53
EPS Growth (1y) % EPS 1y % (Qtr) -13.92 -29.51
FCF Growth (1y) % FCF 1y % (Qtr) 31.14 -36.51
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 2.27 -3.42
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.75 0.63
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.01
Cash Ratio Cash Ratio (Qtr) 0.54 0.73
Current Ratio Curr Ratio (Qtr) 0.81 1.63
Debt to Equity Ratio Debt/Equity (Qtr) 0.39 3.83
Interest Cover Ratio Int Coverage (Qtr) 32.14 53.05
Times Interest Earned Times Interest Earned (Qtr) 32.14 53.05
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 29.80 -30.62
EBIT Margin % EBIT Margin % (Qtr) 23.23 -82.13
EBT Margin % EBT Margin % (Qtr) 22.51 -47.07
Gross Margin % Gross Margin % (Qtr) 26.80 50.48
Net Profit Margin % Net Margin % (Qtr) 12.90 -48.61