Analyst estimate revisions bring Laureate Education (LAUR) into focus

Fresh analyst commentary around Laureate Education (LAUR) is centering on higher earnings estimates, with current year EPS forecasts and expected growth now set above the industry average, pulling more investor attention to the stock.

At a share price of $34.30, Laureate Education has paired a recent 8.3% 1 month share price return with a very large 5 year total shareholder return of about 5x. This suggests that momentum has generally built over time as expectations around earnings have shifted.

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With earnings estimates moving higher, a value score of 5, an intrinsic value gap of about 57%, and a roughly 17% discount to the average analyst target, the key question is whether this is a genuine opportunity or if the market is already pricing in future growth.

Most Popular Narrative: 13.3% Undervalued

On the most followed narrative, Laureate Education's fair value sits at $39.58 per share versus the latest close at $34.30, setting up a valuation gap driven by specific growth, margin and multiple assumptions.

Ongoing expansion into high-growth Latin American markets (Mexico, Peru) through new campus openings and targeted capacity investments leverages rising demand for private tertiary education, which is likely to drive sustained enrollment and revenue growth over the next several years.

Strong momentum in digital learning, particularly the expansion of fully online degree programs for working adults in both Mexico and Peru, broadens Laureate's addressable market and supports accelerated top-line growth by attracting non-traditional students beyond the core undergraduate base.

Want to see what kind of revenue path, margin profile and future earnings multiple are baked into that $39.58 figure? The narrative spells out a detailed growth curve, a shift in profitability and a specific discount rate that all have to line up for this valuation to hold.

The fair value estimate of $39.58 is built using a discount rate of 7.27%, updated assumptions for medium term revenue growth and profit margins, and a future P/E multiple just above the current industry level. Those inputs are applied to projected earnings and cash flows, then discounted back to today to reach a present value for the equity.

That framework helps explain why the narrative arrives at a fair value that is about 13.3% above the current share price, even though revenue and earnings growth are expected to sit below the broader US market. It also reflects the view that current returns on equity and expected earnings growth can support a higher valuation than the analyst target would imply.

Result: Fair Value of $39.58 (UNDERVALUED)

However, this hinges on Mexico and Peru remaining supportive markets, and on online programs not weighing too heavily on tuition levels and margins.

Next Steps

With sentiment split between the potential upside and the risks already flagged, it makes sense to move quickly and test the numbers yourself, starting with 3 key rewards and 1 important warning sign.

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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.