Laureate Education Could Benefit From Rising Demand For Private Post-High School Education

Laureate Education Inc LAUR, which recently made its trading debut earlier this month, got a warm welcome from Wall Street as most of the brokerages started coverage of the company on a bullish note.

What's Laureate, And What's The Demand?

Laureate operates a network of higher education institutions and is the largest global for-profit post-secondary education provider. The company educates over one million students, with its network that comprises about 70 institutions in over 25 countries on over 200 campuses.

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Laureate is poised to benefit from rising global demand for private post-secondary education and its high-quality education makes it the preferred choice to governments.

Jeffrey Meuler of Baird believes the company is well positioned for well-diversified enrollment/revenue growth as the macro headwinds in several markets/geographies appears to be abating.

Ratings

Also, the company’s margin should benefit from initiatives such as EiP, and hybridity. Meuler has begun coverage of Laureate with an Outperform rating and $16 price target.

In a similar vein, BMO’s Jeffrey Silber believes that Laureate is one of the best positioned to benefit from the global movement of expanding higher education.

Silber, who has an Outperform rating and $17 target price, noted that the company’s international presence (95 percent of enrollments in 24 countries outside the United States) differentiates it from the U.S. for-profit college sector.

“While there are numerous risks in investing in a company with such a global footprint, we believe they are incorporated in the stock's current discount to its peers (global basket of education stocks),” Silber wrote in a note.

Meanwhile, Trace Urdan of Credit Suisse is also Outperform-rated on Laureate, with a target price of $19.

Urdan believes Laureate would generate consistent organic revenue growth of 10 percent and EBITDA growth of 15 percent as it continues to take market share “given its proven model for effective, high-quality post-secondary programs to fast-growing but still under-developed economies around the world.”

At last check, shares of Laureate were down 0.68 percent to $13.15.