Is Perdoceo Education a Bargain After Its 40% Surge in 2025?

Trying to figure out what to do with Perdoceo Education stock? You’re not alone. The market just can’t seem to make up its mind lately, either. After a stellar year with shares climbing an astonishing 74.6%, and a staggering 278.5% return over three years, Perdoceo’s price has been on a wild but mostly upward ride. Even with a modest 2.5% dip in the past week, the stock is still up 11.2% over the last month and a huge 40.1% year-to-date.

So what’s driving this momentum? Much of it comes down to ongoing trends in online education, combined with shifting attitudes towards career-focused learning at a time when traditional colleges are under scrutiny. Investors have responded positively, rapidly pushing valuations higher as growth prospects have improved and market confidence has grown. Of course, there is always a risk that sentiment can turn, and that recent price moves may be reflecting new perceptions of risk or profit-taking.

If you’re looking for a quick score, by one valuation framework that checks six key criteria for being undervalued, Perdoceo racks up a 5 out of 6. This makes a strong case that the stock may still be attractively priced despite the run-up. But is it really that simple?

Let’s dig into the numbers, comparing classic valuation benchmarks. And if you stick around until the end, you’ll find a more nuanced way to think about Perdoceo’s value that goes beyond the usual methods.

Perdoceo Education delivered 74.6% returns over the last year. See how this stacks up to the rest of the Consumer Services industry.

Approach 1: Perdoceo Education Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model is a classic approach to stock valuation, aiming to estimate a company’s intrinsic value by projecting its future cash flows and discounting them back to today's dollars. For Perdoceo Education, this involves forecasting how much cash the company will generate and then determining what those future dollars are worth right now.

Currently, Perdoceo’s Free Cash Flow sits at $204.87 million. Analysts expect solid growth over the next decade, with projections partly based on direct analyst estimates for the next five years and then extended trends for the following period, putting 2035’s Free Cash Flow at $366.35 million. That equates to a steady annual growth trajectory, reflecting both strong historical performance and continuing optimism about online and career education.

Using this two-stage Free Cash Flow to Equity model, the calculated intrinsic value per share lands at $104.27. Compared to the current trading price, the DCF model implies that the stock is 64.9% undervalued. This sizable discount suggests a significant margin of safety for investors, as long as those optimistic cash flow estimates hold up.

Result: UNDERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Perdoceo Education.

Our Discounted Cash Flow (DCF) analysis suggests Perdoceo Education is undervalued by 64.9%. Track this in your watchlist or portfolio, or discover more undervalued stocks.

Approach 2: Perdoceo Education Price vs Earnings

For companies that are generating steady profits, the price-to-earnings (PE) ratio is a widely respected way to assess valuation. It gives investors a quick read on how much they are paying for each dollar of a company's earnings. A higher PE often signals strong growth expectations or lower risk, while a lower PE might reflect weaker growth or greater perceived risk.

At the moment, Perdoceo Education trades at a PE ratio of 15.4x. That is lower than the industry average for Consumer Services stocks at 18.3x, and notably below the peer group average of 24.4x. This suggests that, at face value, Perdoceo looks cheaper than many comparable firms. Still, it is important to remember that benchmarks like the industry or peer average do not factor in all the nuances unique to a specific company.

This is where the Simply Wall St "Fair Ratio" comes in. This proprietary metric is set at 17.7x for Perdoceo, and is designed to better reflect the company’s growth potential, profitability, risk profile, market cap, and its particular place within the industry. Unlike a generic average, the Fair Ratio captures a fuller picture by combining earnings quality, growth, and risks into a single expectation.

Since Perdoceo’s actual PE ratio of 15.4x is below its Fair Ratio of 17.7x, the shares appear undervalued by this measure. This reinforces the idea that the market may be discounting some of the company’s upside potential.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Perdoceo Education Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let's introduce you to Narratives. A Narrative is simply the story you believe about a company's future: it is your view on how Perdoceo Education will grow, compete, and adapt, expressed through your own estimates for future revenue, earnings, and profit margins, and what you think is a fair value for the stock today.

With Narratives on Simply Wall St's Community page, you can connect your perspective to a financial forecast and see exactly how your story leads to a fair value. You can then compare this to the current market price to decide if now is the right time to buy, hold, or sell.

What makes Narratives powerful is that they automatically update when the facts change, whether from breaking news, fresh earnings results, or company announcements. This way your investment thesis always reflects the latest developments.

For example, some Perdoceo Education Narratives in the Community see rapid enrollment growth, successful integration of acquisitions, and strong technology investment, leading to a high fair value of $42 per share. Others point to risks from regulation and competition, projecting lower growth and a fair value closer to $33. The result? Investors using Narratives can weigh both bullish and cautious perspectives, choose the outlook they believe in, and act with greater clarity and confidence.

Do you think there's more to the story for Perdoceo Education? Create your own Narrative to let the Community know!

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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