DB:LA3A

Stock Analysis Report

Executive Summary

Laureate Education, Inc., together with its subsidiaries, provides higher education programs and services to students through a network of universities and higher education institutions.

Rewards

Trading at 77.2% below its fair value

Earnings are forecast to grow 54.49% per year

Became profitable this year

Risk Analysis

Interest payments are not well covered by earnings

Highly volatile share price over past 3 months

Large one-off items impacting financial results

Shareholders have been diluted in the past year



Snowflake Analysis

Fair value with moderate growth potential.


Similar Companies

Share Price & News

How has Laureate Education's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: LA3A's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

-2.6%

LA3A

3.2%

DE Consumer Services

2.2%

DE Market


1 Year Return

-29.7%

LA3A

-3.9%

DE Consumer Services

-17.2%

DE Market

Return vs Industry: LA3A underperformed the German Consumer Services industry which returned -3.9% over the past year.

Return vs Market: LA3A underperformed the German Market which returned -17.2% over the past year.


Shareholder returns

LA3AIndustryMarket
7 Day-2.6%3.2%2.2%
30 Day-45.1%-11.7%-15.7%
90 Day-39.4%-10.2%-24.0%
1 Year-29.7%-29.7%-1.9%-3.9%-14.9%-17.2%
3 Year-29.6%-29.6%-15.0%-18.3%-16.4%-23.3%
5 Yearn/a-42.3%-56.1%-16.5%-27.8%

Price Volatility Vs. Market

How volatile is Laureate Education's share price compared to the market and industry in the last 5 years?


Simply Wall St News

No news available

Valuation

Is Laureate Education undervalued compared to its fair value and its price relative to the market?

>50%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: LA3A (€9.45) is trading below our estimate of fair value (€41.42)

Significantly Below Fair Value: LA3A is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: LA3A is poor value based on its PE Ratio (159.8x) compared to the Consumer Services industry average (13.5x).

PE vs Market: LA3A is poor value based on its PE Ratio (159.8x) compared to the German market (16.8x).


Price to Earnings Growth Ratio

PEG Ratio: LA3A is poor value based on its PEG Ratio (2.9x)


Price to Book Ratio

PB vs Industry: LA3A is good value based on its PB Ratio (0.8x) compared to the XE Consumer Services industry average (2.2x).


Next Steps

Future Growth

How is Laureate Education forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

54.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: LA3A's forecast earnings growth (54.5% per year) is above the savings rate (-0.4%).

Earnings vs Market: LA3A's earnings (54.5% per year) are forecast to grow faster than the German market (14.5% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: LA3A's revenue (2.1% per year) is forecast to grow slower than the German market (4.1% per year).

High Growth Revenue: LA3A's revenue (2.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: LA3A's Return on Equity is forecast to be low in 3 years time (9.5%).


Next Steps

Past Performance

How has Laureate Education performed over the past 5 years?

24.4%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: LA3A has a large one-off loss of $66.5M impacting its December 31 2019 financial results.

Growing Profit Margin: LA3A became profitable in the past.


Past Earnings Growth Analysis

Earnings Trend: LA3A has become profitable over the past 5 years, growing earnings by 24.4% per year.

Accelerating Growth: LA3A has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.

Earnings vs Industry: LA3A has become profitable in the last year, making it difficult to compare its past year earnings growth to the Consumer Services industry (42.5%).


Return on Equity

High ROE: LA3A's Return on Equity (0.5%) is considered low.


Next Steps

Financial Health

How is Laureate Education's financial position?


Financial Position Analysis

Short Term Liabilities: LA3A's short term assets ($942.9M) do not cover its short term liabilities ($1.1B).

Long Term Liabilities: LA3A's short term assets ($942.9M) do not cover its long term liabilities ($2.6B).


Debt to Equity History and Analysis

Debt Level: LA3A's debt to equity ratio (45.4%) is considered high.

Reducing Debt: LA3A's debt to equity ratio has reduced from 409.9% to 45.4% over the past 5 years.


Balance Sheet

Inventory Level: LA3A has a high level of physical assets or inventory.

Debt Coverage by Assets: LA3A's debt is not covered by short term assets (assets are 0.7x debt).


Cash Runway Analysis

For companies that have on average been loss making in the past we assess whether they have at least 1 year of cash runway.

Stable Cash Runway: LA3A is profitable, therefore cash runway is not a concern.

Forecast Cash Runway: LA3A is profitable, therefore cash runway is not a concern.


Next Steps

Dividend

What is Laureate Education's current dividend yield, its reliability and sustainability?

0.69%

Forecast Dividend Yield


Dividend Yield vs Market

Notable Dividend: Unable to evaluate LA3A's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate LA3A's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if LA3A's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if LA3A's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of LA3A's dividend in 3 years as they are not forecast to pay a notable one for the German market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

2.2yrs

Average management tenure


CEO

Eilif Serck-Hanssen (53yo)

2.17s

Tenure

US$5,147,031

Compensation

Mr. Eilif Serck-Hanssen has been Chief Executive Officer and Director of Laureate Education, Inc. since January 01, 2018 and also serves as its President since July 15, 2019. Mr. Serck-Hanssen served as Pr ...


CEO Compensation Analysis

Compensation vs Market: Eilif's total compensation ($USD5.15M) is above average for companies of similar size in the German market ($USD1.85M).

Compensation vs Earnings: Eilif's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Eilif Serck-Hanssen
President2.17yrsUS$5.15m0.16% $3.2m
Jean-Jacques Charhon
Executive VP & CFO2.17yrsUS$2.27m0.049% $974.8k
Timothy Grace
Chief Human Resources Officer1.83yrsUS$1.88m0.017% $332.8k
Juan José Hurtado
President & CEO of Laureate Mexico & Central America & Senior VP of Global Ope. & Learning & Inno.no datano data0.0066% $131.7k
Tal Darmon
Chief Accounting Officerno datano data0.011% $212.7k
Richard Patro
Chief Information Officer2.33yrsno datano data
Victoria Silbey
Senior VP2.5yrsno data0.025% $498.2k
Jesus Villate
Chief Executive Officer of Latin Americano datano datano data
Paula Singer
Chief Executive Officer of Walden & Laureate Online Partners2.17yrsUS$2.51m0.0034% $68.4k
Jonathan Kaplan
Chief Executive Officer of Laureate Online3.17yrsno datano data

2.2yrs

Average Tenure

54.5yo

Average Age

Experienced Management: LA3A's management team is considered experienced (2.2 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Eilif Serck-Hanssen
President2.17yrsUS$5.15m0.16% $3.2m
Ian Snow
Independent Director12.67yrsUS$57.50kno data
Kenneth Freeman
Chairman of the Board1.17yrsUS$330.84k0.011% $216.1k
Judith Rodin
Independent Director6.25yrsUS$282.51k0.019% $390.4k
Steven Taslitz
Director12.67yrsUS$60.00kno data
Pedro del Corro García Lomas
Director3.08yrsUS$60.01kno data
George Muñoz
Independent Director7yrsUS$260.00k0.032% $641.8k
Brian Carroll
Independent Director12.67yrsUS$70.00k0.014% $278.5k
Andrew Cohen
Director6.75yrsUS$60.01kno data
William Cornog
Director3.08yrsUS$75.01k0.0045% $89.6k

6.5yrs

Average Tenure

57.5yo

Average Age

Experienced Board: LA3A's board of directors are considered experienced (6.5 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 4.3%.


Top Shareholders

Company Information

Laureate Education, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Laureate Education, Inc.
  • Ticker: LA3A
  • Exchange: DB
  • Founded: 1989
  • Industry: Education Services
  • Sector: Consumer Services
  • Market Cap: US$2.203b
  • Listing Market Cap: US$2.005b
  • Shares outstanding: 209.64m
  • Website: https://www.laureate.net

Number of Employees


Location

  • Laureate Education, Inc.
  • 650 South Exeter Street
  • Baltimore
  • Maryland
  • 21202-4382
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
LA3ADB (Deutsche Boerse AG)YesClass A Common StockDEEURFeb 2017
LAURNasdaqGS (Nasdaq Global Select)YesClass A Common StockUSUSDFeb 2017

Biography

Laureate Education, Inc., together with its subsidiaries, provides higher education programs and services to students through a network of universities and higher education institutions. It offers a range of undergraduate and graduate degree programs primarily in the areas of business and management, medicine and health sciences, and engineering and information technology through campus-based, online, and hybrid programs. The company also operates online institutions that offer professional degree programs primarily for the working adults with undergraduate and graduate degree programs. It provides its services in Brazil, Mexico, Chile, Peru, Australia, China, New Zealand, the United Kingdom, and the United States. The company was formerly known as Sylvan Learning Systems, Inc. and changed its name to Laureate Education, Inc. in May 2004. The company was founded in 1989 and is headquartered in Baltimore, Maryland. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/04/01 00:42
End of Day Share Price2020/03/31 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.