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Adtalem Global Education Inc. (ATGE) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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Adtalem Global Education Inc. (ATGE)

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Intrinsic Value (DCF)

Current$117.39
→
Intrinsic$204.67
+74%
$134.70$204.67$337.51
Market implies 7% growth for 5 years
DCF analysis suggests ATGE could have 74% upside at 20% growth — verify assumptions match your view.
At $117, the market prices in only 7% growth — below historical 20%, suggesting low expectations.
Range: Bear $135 → Bull $338. Current price implies expectations below the bear case — very conservative expectations.
Discount ↓Growth →16%18%20%22%
8%$253$275$299$324
10%$173$188$205$222
12%$129$140$153$166
14%$101$110$120$130

Bull Case

  • Bull case ($338) offers 188% upside at 24% growth, 9% discount
  • Price below even worst-case scenario — strong margin of safety
  • Market-implied growth (7%) ≤ historical CAGR (20%)

Bear Case

  • Bear case ($135) with 16% growth, 12% discount rate
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5-Year Free Cash Flow Projection

Year 1$345.09M
Year 2$414.10M
Year 3$496.92M
Year 4$596.31M
Year 5$715.57M
Terminal$10.53B

📐 Model Inputs

Growth Rate20.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$287.57MTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

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Frequently Asked Questions

Is ATGE stock undervalued or overvalued?
🟢 UNDERVALUED

ATGE trades at $117.39 vs. our DCF-derived intrinsic value of $204.67, implying +85% upside. At a 10.0% WACC and 20.0% projected FCF growth, the market appears to be underpricing the present value of ATGE's future cash flows. The bear case ($129.10) still suggests upside, providing margin of safety.

What is ATGE's intrinsic value?

Using a 5-year DCF model: Base FCF of $288M, projected at 20.0% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 10.0% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $573M net debt and dividing by 0.04B shares: Bear $129.10 | Base $204.67 | Bull $315.95. Current price $117.39 implies +85% to base case.

How is ATGE's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 20.0% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=10.0%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($8.42B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 29.3x.