Grand Canyon Education (LOPE): Reassessing Valuation After Recent Share Price Pullback

Grand Canyon Education (LOPE) has been drifting lower over the past few months, with the stock down about 5% this month and roughly 26% in the past 3 months despite steady earnings growth.

See our latest analysis for Grand Canyon Education.

Zooming out, that recent weakness in the 1 month and 3 month share price returns sits in contrast to a still impressive 3 year and 5 year total shareholder return. This suggests long term momentum remains intact even as near term sentiment cools.

If LOPE’s pullback has you reassessing your watchlist, this could be a good moment to explore fast growing stocks with high insider ownership for other compelling growth stories with skin in the game.

With earnings still climbing, shares well below analyst targets, and a solid multiyear track record, the key question now is whether LOPE is quietly undervalued or if the market has already priced in its next leg of growth.

Most Popular Narrative: 35.1% Undervalued

With Grand Canyon Education’s fair value in the narrative set well above the last close of $155, the valuation hinges on ambitious growth and margin assumptions.

In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $1.3 billion, earnings will come to $306.2 million, and it would be trading on a PE ratio of 20.5x, assuming you use a discount rate of 6.9%.

Read the complete narrative.

Curious how steady mid single digit revenue growth and rising margins can still justify a sizeable upside from here? The narrative leans on earnings power, shrinking share count, and a future valuation multiple that has to hold up under tighter discount rate assumptions. Want to see exactly how those moving parts stack together into that higher fair value?

Result: Fair Value of $239 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, softer revenue per student and persistent legal and regulatory pressures could still derail the bullish case if margin gains fail to materialize.

Find out about the key risks to this Grand Canyon Education narrative.

Another Angle on Valuation

Our ratio based view is less generous. LOPE trades at 20.3 times earnings, richer than both the US Consumer Services average at 15.6 times and peer average at 17.5 times, though below its 23.1 times fair ratio. This raises the question: is this a quality premium or downside risk?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Grand Canyon Education Narrative

If you see the numbers differently or want to test your own assumptions directly in the model, build a custom narrative in minutes, Do it your way.

A good starting point is our analysis highlighting 3 key rewards investors are optimistic about regarding Grand Canyon Education.

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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.

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