Does the Recent 36.7% Drop Reveal a New Opportunity for Adtalem Global Education in 2025?

• Ever wondered if Adtalem Global Education might be a hidden value opportunity, or if its recent successes have already driven the price out of reach?
• The stock has seen some wild swings lately, rising 3.2% year-to-date and an impressive 134.0% over three years. However, there was a sharp dip of 36.7% in the last month that has grabbed investors’ attention.
• Market chatter has increased after the company announced a new strategic partnership aimed at expanding its professional education portfolio. Broader sector volatility has contributed to further price movement. Various analyst upgrades and institutional buying over the past few weeks have also put Adtalem firmly in the spotlight for both growth and turnaround stories.
• When it comes to valuation, Adtalem Global Education currently scores 5 out of 6 on our valuation checks, indicating it passes almost every key test of an undervalued stock. We will break down the different ways to look at the company’s value next, plus reveal a smarter approach savvy investors use to spot real bargains.

Adtalem Global Education delivered 9.1% returns over the last year. See how this stacks up to the rest of the Consumer Services industry.

Approach 1: Adtalem Global Education Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model estimates what a company is really worth by taking all expected future cash flows, forecasting them out over a period, and then discounting them back to today’s value. This process helps investors understand whether a company's stock is potentially undervalued or overvalued compared to its future earnings potential.

For Adtalem Global Education, the analysis begins with its latest Free Cash Flow of $328.7 million. Analysts provide detailed estimates for the next several years. By 2027, Free Cash Flow is projected at about $314.8 million, and extrapolations for the following years suggest gradual increases, with a forecast of around $361.7 million by 2035. These figures reflect moderate but steady growth, based on both analyst data and further conservative projections by Simply Wall St.

Using the DCF model, the intrinsic value per share works out to $180.70. This valuation suggests the stock is trading at a 47.0% discount to its estimated fair value, which means it could be significantly undervalued at current prices.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Adtalem Global Education is undervalued by 47.0%. Track this in your watchlist or portfolio, or discover 906 more undervalued stocks based on cash flows.

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

Approach 2: Adtalem Global Education Price vs Earnings

For profitable companies like Adtalem Global Education, the Price-to-Earnings (PE) ratio is a widely used valuation metric because it directly links a company’s market value with its underlying earning power. It is an accessible measure that investors often use to assess whether a stock is fairly valued, undervalued, or overpriced relative to its profits.

What counts as a "normal" or "fair" PE ratio can vary depending on factors such as a company’s growth prospects and risk profile. Generally, higher growth expectations or lower risks justify a higher PE ratio, while slower growth or greater risk tends to warrant a lower multiple. For this reason, direct comparison to industry averages and peers provides a useful, but only partial, snapshot.

Adtalem Global Education is currently trading at a PE ratio of 14.05x. This is slightly below both the Consumer Services industry average of 14.26x and its key peer group, which averages 14.65x. However, Simply Wall St’s proprietary “Fair Ratio” model puts Adtalem’s Fair PE at 21.31x, higher than both the current multiple and industry benchmarks. The Fair Ratio integrates a range of factors specific to Adtalem, including earnings growth, profit margins, market cap, risk levels, and industry-specific dynamics. This makes it a more tailored and insightful benchmark than simply comparing with peers or industry norms.

Since Adtalem’s Fair Ratio is substantially above its current PE multiple, this suggests the stock is undervalued according to this approach.

Result: UNDERVALUED

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1418 companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Adtalem Global Education Narrative

Earlier we mentioned that there is an even better way to understand valuation. Let's introduce you to Narratives. A Narrative is simply your story or perspective about a company, built on your own assumptions about its fair value, future revenue growth, earnings, and profit margins. Instead of just relying on static numbers, Narratives link the company’s journey to a tailored financial forecast and then to a personal fair value, making investing both more meaningful and actionable.

Narratives are an easy, accessible tool available for every stock on Simply Wall St’s Community page, already used by millions of investors. They help you decide when to buy or sell by clearly showing your own Fair Value estimate alongside the current price, so you can act when there is a genuine opportunity.

Importantly, Narratives update automatically when new facts emerge, such as breaking news or fresh earnings reports, so your viewpoint always keeps pace with the real world. For example, some investors see significant upside for Adtalem Global Education and set a high Fair Value, while others who are more cautious use lower forecasts to reflect uncertainty in the sector.

Do you think there's more to the story for Adtalem Global Education? Head over to our Community to see what others are saying!

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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