As of May 29, 2025, Laureate Education Inc's estimated intrinsic value ranges from $22.39 to $33.54 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $33.54 | +50.4% |
| Discounted Cash Flow (5Y) | $29.27 | +31.2% |
| Dividend Discount Model (Multi-Stage) | $26.07 | +16.9% |
| Dividend Discount Model (Stable) | $26.76 | +20.0% |
| Earnings Power Value | $22.39 | +0.4% |
Is Laureate Education Inc (LAUR) undervalued or overvalued?
With the current market price at $22.31, the stock appears to be significantly undervalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Laureate Education Inc's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.8 | 0.88 |
| Cost of equity | 7.5% | 9.8% |
| Cost of debt | 4.5% | 9.0% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 0.03 | 0.03 |
| After-tax WACC | 7.4% | 9.7% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $29 | $4,369M | 74.1% |
| 10-Year Growth | $34 | $5,006M | 56.4% |
| 5-Year EBITDA | $31 | $4,696M | 75.9% |
| 10-Year EBITDA | $35 | $5,292M | 58.7% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $281M |
| Discount Rate (WACC) | 9.7% - 7.4% |
| Enterprise Value | $2,897M - $3,789M |
| Net Debt | $3M |
| Equity Value | $2,894M - $3,786M |
| Outstanding Shares | 149M |
| Fair Value | $19 - $25 |
| Selected Fair Value | $22.39 |
| Metric | Value |
|---|---|
| Market Capitalization | $3328M |
| Enterprise Value | $3331M |
| Trailing P/E | 11.56 |
| Forward P/E | 10.74 |
| Trailing EV/EBITDA | 9.70 |
| Current Dividend Yield | 1.54% |
| Dividend Growth Rate (5Y) | 67.71% |
| Debt-to-Equity Ratio | 0.03 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 30% | $10.06 |
| Discounted Cash Flow (5Y) | 25% | $7.32 |
| Dividend Discount Model (Multi-Stage) | 20% | $5.21 |
| Dividend Discount Model (Stable) | 15% | $4.01 |
| Earnings Power Value | 10% | $2.24 |
| Weighted Average | 100% | $28.85 |
Based on our comprehensive valuation analysis, Laureate Education Inc's weighted average intrinsic value is $28.85, which is approximately 29.3% above the current market price of $22.31.
Key investment considerations:
Given these factors, we believe Laureate Education Inc is currently significantly undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.