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Laureate Education, Inc. (LAUR) Intrinsic Value

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

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Laureate Education, Inc. (LAUR)

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Intrinsic Value (DCF)

Current$35.42
→
Intrinsic$34.75
-2%
$22.96$34.75$57.12
Market implies 25% growth for 5 years
LAUR appears fairly valued — current price aligns with our DCF estimate.
At $35, the market prices in continued strong cash flow growth (25%) — likely reflecting buybacks, margin stability, and ecosystem strength.
Range: Bear $23 → Bull $57. Current price implies expectations near the base case.
Discount ↓Growth →21%23%25%27%
8%$43$47$51$55
10%$30$32$35$38
12%$22$24$26$28
14%$17$19$20$22

Bull Case

  • Bull case ($57) offers 61% upside at 30% growth, 9% discount

Bear Case

  • Bear case ($23) implies 35% downside at 20% growth, 12% discount
  • Using 25% growth — aggressive, watch for mean reversion
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5-Year Free Cash Flow Projection

Year 1$201.06M
Year 2$251.32M
Year 3$314.15M
Year 4$392.69M
Year 5$490.87M
Terminal$7.22B

📐 Model Inputs

Growth Rate25.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$160.85MTTM 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 LAUR stock undervalued or overvalued?
🔴 OVERVALUED

LAUR trades at $35.42 vs. our DCF-derived intrinsic value of $28.41, implying -19% downside. Using a 10.0% WACC and 25.0% FCF growth assumption, the current price requires growth rates above our estimates to be justified. Even our bull case ($43.92) suggests limited upside.

What is LAUR's intrinsic value?

Using a 5-year DCF model: Base FCF of $161M, projected at 25.0% 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 $336M net debt and dividing by 0.15B shares: Bear $17.88 | Base $28.41 | Bull $43.92. Current price $35.42 implies -19% to base case.

How is LAUR's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 25.0% 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 ($4.71B).

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.