U.S. markets close in 4 hours 20 minutes
  • S&P 500

    4,230.26
    -53.48 (-1.25%)
     
  • Dow 30

    33,722.15
    -276.89 (-0.81%)
     
  • Nasdaq

    12,710.35
    -254.99 (-1.97%)
     
  • Russell 2000

    1,954.14
    -46.59 (-2.33%)
     
  • Crude Oil

    91.02
    +0.52 (+0.57%)
     
  • Gold

    1,762.20
    -9.00 (-0.51%)
     
  • Silver

    19.03
    -0.43 (-2.23%)
     
  • EUR/USD

    1.0048
    -0.0044 (-0.43%)
     
  • 10-Yr Bond

    2.9940
    +0.1140 (+3.96%)
     
  • GBP/USD

    1.1814
    -0.0119 (-1.00%)
     
  • USD/JPY

    137.0250
    +1.1630 (+0.86%)
     
  • BTC-USD

    21,382.45
    -2,084.43 (-8.88%)
     
  • CMC Crypto 200

    507.58
    -34.02 (-6.28%)
     
  • FTSE 100

    7,542.03
    +0.18 (+0.00%)
     
  • Nikkei 225

    28,930.33
    -11.77 (-0.04%)
     

Loss-Making Laureate Education, Inc. (NASDAQ:LAUR) Set To Breakeven

  • Oops!
    Something went wrong.
    Please try again later.
·3 min read
In this article:
  • Oops!
    Something went wrong.
    Please try again later.

With the business potentially at an important milestone, we thought we'd take a closer look at Laureate Education, Inc.'s (NASDAQ:LAUR) future prospects. Laureate Education, Inc., together with its subsidiaries, provides higher education programs and services to students through a network of universities and higher education institutions. With the latest financial year loss of US$295m and a trailing-twelve-month loss of US$175m, the US$1.9b market-cap company alleviated its loss by moving closer towards its target of breakeven. Many investors are wondering about the rate at which Laureate Education will turn a profit, with the big question being “when will the company breakeven?” In this article, we will touch on the expectations for the company's growth and when analysts expect it to become profitable.

Check out our latest analysis for Laureate Education

Laureate Education is bordering on breakeven, according to the 3 American Consumer Services analysts. They anticipate the company to incur a final loss in 2021, before generating positive profits of US$119m in 2022. The company is therefore projected to breakeven around a year from now or less! At what rate will the company have to grow in order to realise the consensus estimates forecasting breakeven in under 12 months? Using a line of best fit, we calculated an average annual growth rate of 65%, which is extremely buoyant. Should the business grow at a slower rate, it will become profitable at a later date than expected.

earnings-per-share-growth
earnings-per-share-growth

We're not going to go through company-specific developments for Laureate Education given that this is a high-level summary, however, keep in mind that generally a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

One thing we’d like to point out is that The company has managed its capital prudently, with debt making up 10% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on Laureate Education, so if you are interested in understanding the company at a deeper level, take a look at Laureate Education's company page on Simply Wall St. We've also compiled a list of important aspects you should look at:

  1. Valuation: What is Laureate Education worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Laureate Education is currently mispriced by the market.

  2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Laureate Education’s board and the CEO’s background.

  3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.

Join A Paid User Research Session
You’ll receive a US$30 Amazon Gift card for 1 hour of your time while helping us build better investing tools for the individual investors like yourself. Sign up here