Is Laureate Education (LAUR) Pricing Reflect Long Term Demand For Listed Higher Education Groups

• If you are wondering whether Laureate Education's current share price reflects its true worth, you are not alone. This article is built to help you size up the stock's value with clear numbers.
• The share price closed at US$34.87 recently, with returns of 0.9% over 7 days, 6.6% over 30 days, 4.7% year to date, 85.3% over 1 year and a very large gain over 5 years that works out to roughly 4x the starting level across 3 years.
• Recent news around Laureate Education has focused on its role as a listed higher education group and ongoing interest in education providers as an asset class. This gives some context to these strong multi year return numbers. Coverage has generally highlighted how listed operators in the sector can draw attention when investors reassess long term demand for education services and the resilience of their business models.
• On Simply Wall St's valuation checks, Laureate Education scores 3 out of 6. In the sections ahead we will walk through the key valuation methods behind that score and finish with a different way of thinking about valuation that can round out your view of the stock.

Laureate Education delivered 85.3% returns over the last year. See how this stacks up to the rest of the Consumer Services industry.

Approach 1: Laureate Education Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model estimates what a company might be worth today by projecting its future cash flows and then discounting those back into present day dollars. It is essentially asking what future cash generated for shareholders is worth in today's terms.

For Laureate Education, the model uses a 2 Stage Free Cash Flow to Equity approach, starting from last twelve month free cash flow of about $243.9 million. Analysts supply free cash flow estimates out to 2027, including $297.15 million for 2026 and $353 million for 2027. Simply Wall St then extrapolates further out to 2035, with a 2035 free cash flow projection of about $592.1 million. Each of these yearly cash flows is discounted back to a present value using the DCF framework.

Adding these discounted values together gives an estimated intrinsic value of about $73.63 per share, compared with the recent share price of $34.87. On this model, Laureate Education screens as around 52.6% undervalued on a pure cash flow basis.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Laureate Education is undervalued by 52.6%. Track this in your watchlist or portfolio, or discover 885 more undervalued stocks based on cash flows.

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Laureate Education.

Approach 2: Laureate Education Price vs Earnings (P/E)

For a profitable company like Laureate Education, the P/E ratio is a useful way to compare what you are paying for each dollar of current earnings with other stocks. Investors typically accept a higher or lower P/E depending on what they expect for future growth and how they view the riskiness of those earnings.

Laureate Education currently trades on a P/E of 25.29x. That sits above both the Consumer Services industry average of 16.87x and the broader peer group average of 18.40x. This tells you the market is paying a higher price for its earnings than for many similar companies.

Simply Wall St also calculates a “Fair Ratio” for Laureate Education of 26.86x. This is a proprietary figure that aims to reflect the P/E that might be appropriate given factors such as the company’s earnings growth profile, profit margins, industry, market cap and specific risks. Because it adjusts for these elements, the Fair Ratio can offer a more tailored yardstick than a simple comparison with peers or an industry average.

With a current P/E of 25.29x against a Fair Ratio of 26.86x, Laureate Education screens as slightly undervalued on this metric.

Result: UNDERVALUED

P/E ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1439 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Laureate Education Narrative

Earlier we mentioned that there is an even better way to understand valuation. Let us introduce you to Narratives, which are simple stories you build around a company that connect your view of its future revenue, earnings and margins to a financial forecast and then to a personal fair value. All of this happens within an easy tool on Simply Wall St's Community page that millions of investors use to compare their Fair Value to the current price, see how that might influence their buy or sell decisions, and watch those views update automatically when new information such as Laureate Education’s revised 2025 revenue guidance, share repurchases or the latest analyst fair value of about US$36.83 arrives. One investor who focuses on higher long term revenue growth and margins may end up with a higher fair value than another investor who is more cautious about Laureate’s exposure to Mexico and Peru and competition in digital learning, even though both are using the same underlying data.

Do you think there's more to the story for Laureate Education? Head over to our Community to see what others are saying!

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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