As of June 14, 2025, Grand Canyon Education Inc's estimated intrinsic value ranges from $80.30 to $265.22 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $265.22 | +43.5% |
| Discounted Cash Flow (5Y) | $223.41 | +20.9% |
| Dividend Discount Model (Multi-Stage) | $101.18 | -45.3% |
| Dividend Discount Model (Stable) | $102.15 | -44.7% |
| Earnings Power Value | $80.30 | -56.6% |
Is Grand Canyon Education Inc (LOPE) undervalued or overvalued?
With the current market price at $184.86, the stock appears to be fairly valued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Grand Canyon 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 | 1.09 | 1.32 |
| Cost of equity | 8.9% | 12.3% |
| Cost of debt | 4.5% | 4.5% |
| Tax rate | 22.0% | 22.5% |
| Debt/Equity ratio | 1 | 1 |
| After-tax WACC | 6.2% | 7.9% |
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 | $223 | $6,194M | 83.7% |
| 10-Year Growth | $265 | $7,380M | 70.9% |
| 5-Year EBITDA | $160 | $4,397M | 77.0% |
| 10-Year EBITDA | $198 | $5,485M | 60.8% |
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 | $148M |
| Discount Rate (WACC) | 7.9% - 6.2% |
| Enterprise Value | $1,878M - $2,389M |
| Net Debt | $(145)M |
| Equity Value | $2,022M - $2,534M |
| Outstanding Shares | 28M |
| Fair Value | $71 - $89 |
| Selected Fair Value | $80.30 |
| Metric | Value |
|---|---|
| Market Capitalization | $5244M |
| Enterprise Value | $5100M |
| Trailing P/E | 22.82 |
| Forward P/E | 20.77 |
| Trailing EV/EBITDA | 9.15 |
| Current Dividend Yield | 0.00% |
| Dividend Growth Rate (5Y) | 0.00% |
| Debt-to-Equity Ratio | 0.99 |
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% | $79.57 |
| Discounted Cash Flow (5Y) | 25% | $55.85 |
| Dividend Discount Model (Multi-Stage) | 20% | $20.24 |
| Dividend Discount Model (Stable) | 15% | $15.32 |
| Earnings Power Value | 10% | $8.03 |
| Weighted Average | 100% | $179.01 |
Based on our comprehensive valuation analysis, Grand Canyon Education Inc's weighted average intrinsic value is $179.01, which is approximately 3.2% below the current market price of $184.86.
Key investment considerations:
Given these factors, we believe Grand Canyon Education Inc is currently fairly valued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.