Group 1: Company Overview - Laureate Education (LAUR) is part of the Consumer Discretionary sector, which includes 268 individual stocks and currently holds a Zacks Sector Rank of 10 [2] - The Zacks Rank for LAUR is 1 (Strong Buy), indicating a favorable outlook based on earnings estimate revisions and improving earnings outlooks [3] Group 2: Performance Metrics - The Zacks Consensus Estimate for LAUR's full-year earnings has increased by 9.4% over the past quarter, reflecting stronger analyst sentiment and an improving earnings outlook [4] - Year-to-date, LAUR has returned 5.5%, outperforming the Consumer Discretionary sector average return of -4.1% [4] Group 3: Industry Context - Laureate Education belongs to the Schools industry, which consists of 18 individual stocks and currently ranks 30 in the Zacks Industry Rank; this industry has gained an average of 4.7% year-to-date [6] - In contrast, Lionsgate Studios Corp. (LION), another outperforming stock in the Consumer Discretionary sector, belongs to the Media Conglomerates industry, which has seen a decline of -5.7% year-to-date [6]

Core Insights - The Zacks Rank system emphasizes earnings estimates and revisions to identify winning stocks, with value investing being a preferred strategy in various market conditions [1] - Zacks has introduced the Style Scores system to highlight stocks with specific characteristics, particularly those with high grades in the Value category [2] Company Analysis: Laureate Education (LAUR) - Laureate Education (LAUR) currently holds a Zacks Rank of 1 (Strong Buy) and an A grade for Value, indicating strong investment potential [3] - The stock has a P/E ratio of 12.39, which is lower than the industry average of 14.91, suggesting it may be undervalued [3] - Over the past year, LAUR's Forward P/E has fluctuated between a high of 13.71 and a low of 9.90, with a median of 11.29 [3] - LAUR's P/B ratio stands at 3.12, which is favorable compared to the industry average P/B of 3.47, indicating solid valuation metrics [4] - The P/B ratio has ranged from a high of 3.32 to a low of 2.22 over the past year, with a median of 2.63 [4] - The combination of these valuation metrics suggests that LAUR is likely undervalued, supported by a strong earnings outlook [5]

Core Points - Laureate Education, Inc. will participate in upcoming conferences, including a presentation by CEO Eilif Serck-Hanssen at the Morgan Stanley Brazil Education Corporate Access Day on April 15, 2025 [1] - The company operates five higher education institutions in Mexico and Peru, serving over 450,000 students through various degree programs [3] Conference Details - The Morgan Stanley 17th Annual Latin America Executive Conference is scheduled for April 2-3, 2025, in New York City [5] - The 2025 Jefferies Latin American Summit will take place on April 8-9, 2025, also in New York City [5] Company Overview - Laureate Education is committed to academic quality and innovation, aiming for market-leading employability outcomes and increased accessibility to higher education [3]

Group 1 - Laureate Education (LAUR) is a strong performer in the Consumer Discretionary sector, with a year-to-date return of approximately 9%, outperforming the sector average of 3.2% [4] - The Zacks Rank for Laureate Education is 1 (Strong Buy), indicating positive analyst sentiment and an improving earnings outlook, with a 9.4% increase in the consensus estimate for full-year earnings over the past 90 days [3] - The Schools industry, to which Laureate Education belongs, has an average year-to-date return of 5.4%, further highlighting LAUR's strong performance relative to its peers [5] Group 2 - The Consumer Discretionary group, which includes 267 companies, is currently ranked 9 within the Zacks Sector Rank, reflecting the overall strength of the sector [2] - Another notable stock in the Consumer Discretionary sector is Lionsgate Studios Corp. (LION), which has a year-to-date return of 12.1% and a Zacks Rank of 2 (Buy) [4][5] - The Media Conglomerates industry, which includes Lionsgate Studios, has a lower year-to-date return of 3.3% and is ranked 85, indicating that LAUR is performing better than some of its industry peers [6]

Financial Data and Key Metrics Changes - In Q4 2024, revenue was $423 million, and adjusted EBITDA was $141 million, representing a 10% year-over-year increase in revenue on an organic constant currency basis, driven by a 5% increase in total enrollment volume [21][22] - For the full year 2024, revenue was $1.567 billion, with adjusted EBITDA of $450 million, resulting in an adjusted EBITDA margin of 28.7%, a historic high for the company [23][24] - Full year net income was $296 million, leading to earnings per share of $1.92 [24] Business Line Data and Key Metrics Changes - In Mexico, new enrollments increased by 4% for the year, with revenue growth of 10% driven by an 8% increase in average total enrollments [29] - In Peru, new enrollments increased by 6% for the year, with revenue growth of 4% driven by a 2% increase in average total enrollments [32] Market Data and Key Metrics Changes - The company remains the largest higher education provider in Mexico and Peru, with strong demand for quality higher education driven by rising participation rates and strong wage premiums for graduates [9][14] - Peru's GDP growth for 2025 is expected to reach approximately 3%, indicating a recovery from the recent recession [16] Company Strategy and Development Direction - The company plans to open four new campuses for its value brands, with two expected to launch in 2025, marking the first new campus launches since 2019 [13] - The focus remains on enhancing academic offerings and expanding digital education capabilities [13][14] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the economic environment in Mexico, despite geopolitical uncertainties, and expects GDP growth of about 1% for 2025 [15][53] - The company anticipates flat to slightly down reported revenues for 2025, but expects growth in adjusted EBITDA and unlevered free cash flow due to local currency revenue growth and margin expansion efforts [19][41] Other Important Information - The company returned over $100 million to shareholders in 2024 and has returned nearly $3 billion since 2019 through share repurchases and cash distributions [8][33] - The company introduced new non-GAAP metrics for adjusted net income and adjusted earnings per share to provide a clearer picture of underlying profitability [25][26] Q&A Session Summary Question: Impact of tariffs and economic environment in Mexico - Management acknowledged that while tariffs do not directly impact the business, a slowdown in foreign direct investment and CapEx spending has affected GDP growth, which in turn impacts enrollments [48][49] Question: Current capital allocation policy - The company aims for a 50% free cash flow conversion on EBITDA, with plans to return 50% of available free cash flow to shareholders after supporting growth [55][56] Question: Tax rate and Peru intake - The effective tax rate is expected to be below 40%, and management is optimistic about the Peru intake due to improving market conditions and GDP growth expectations [62][64]

©2025 Laureate Education, Inc. Forward Looking Statements This presentation includes statements that express Laureate's opinions, expectations, beliefs, plans, objectives, assumptions or projections regarding future events or future results and therefore are, or may be deemed to be, ''forward-looking statements'' within the meaning of the federal securities laws, which involve risks and uncertainties. Laureate's actual results may vary significantly from the results anticipated in these forward-looking stat ...

Core Insights - Laureate Education, Inc. reported strong financial performance for the fourth quarter and the year ended December 31, 2024, with revenue growth and margin expansion [4][5][9] Fourth Quarter 2024 Highlights - Reported revenue was $423.4 million, a 3% increase from $409.4 million in Q4 2023, while organic constant currency revenue grew by 10% [5][6] - Operating income rose to $124.2 million from $110.0 million year-over-year [6][29] - Net income for Q4 2024 was $93.6 million, significantly up from $41.7 million in Q4 2023, driven by favorable foreign currency exchange impacts and higher operating income [5][6][29] - Basic and diluted earnings per share were $0.62 for Q4 2024 [6][29] Year Ended December 31, 2024 Highlights - Total revenue for the year was $1,566.6 million, a 6% increase from $1,484.3 million in 2023, with organic constant currency revenue up 7% [9][30] - Operating income for the year increased to $374.0 million from $338.8 million [9][30] - Net income for 2024 was $296.4 million, compared to $107.3 million in 2023, reflecting a substantial increase of $189.1 million [9][30] - Basic and diluted earnings per share for the year were $1.93 and $1.92, respectively [9][30] Enrollment Metrics - New enrollments for FY 2024 increased by 5% compared to FY 2023, with total enrollments also up by 5% [8][9] - In Peru, new enrollments rose by 6% and total enrollments by 3%, while in Mexico, new enrollments increased by 4% and total enrollments by 7% [8][9] Balance Sheet and Cash Flow - As of December 31, 2024, the company had $91.4 million in cash and cash equivalents and gross debt of $102.1 million, resulting in net debt of $10.7 million [11][12] - The company repurchased approximately $102 million of its common stock during 2024, with $98 million remaining under its share repurchase authorization [12] Outlook for Fiscal 2025 - The company anticipates continued growth opportunities in 2025, despite expected foreign currency translation headwinds due to the weakening of the Mexican Peso [4][13] - Projected total enrollments for 2025 are expected to be between 489,000 and 495,000 students, reflecting a growth of 4%-5% [16] - Revenue is expected to range from $1,545 million to $1,570 million, indicating flat performance to a slight decline on an as-reported basis, but growth of 6%-7% on an organic constant currency basis [16]

Financial Performance and Risks - As of December 31, 2024, the net carrying value of goodwill and other intangible assets totaled approximately $711 million[117]. - A hypothetical 10% adverse change in average annual foreign currency exchange rates would have decreased revenue, operating income, and Adjusted EBITDA by approximately $156.6 million, $43.6 million, and $50.4 million, respectively[105]. - The company reported that essentially all of its revenues originated outside the United States in 2024, making it susceptible to currency exchange rate fluctuations[105]. - The company may experience volatility in earnings due to potential hyperinflation in countries where it operates[106]. - The company has identified certain tax-related contingencies that could have an adverse effect on its results of operations if outcomes are unfavorable[110]. - The company is subject to regular review and audit by tax authorities, which could negatively affect its operating results and financial condition[109]. - The company may face disruptions in credit and equity markets, potentially affecting access to capital and increasing borrowing costs under existing credit facilities[141]. - The potential for Peruvian tax liabilities could materially impact the company's business and results of operations if not managed properly[149]. Operational Risks - The company faces risks associated with maintaining and increasing tuition rates and student enrollments in its institutions[13]. - The company relies on its information technology systems, and any disruptions could materially affect its ability to attract and retain students[111]. - The company is exposed to risks associated with cybersecurity incidents, which could lead to reputational damage and operational interruptions[113]. - Political and social unrest, such as protests and strikes, could disrupt operations and student retention, potentially leading to increased security costs and adverse financial effects[121]. - Natural disasters, including those exacerbated by climate change, pose risks to the company's institutions in Mexico and Peru, which could lead to enrollment reductions and campus closures[122]. - The competitive market for attracting and retaining qualified faculty poses a risk to maintaining educational quality and could adversely affect the company's financial condition[127]. - Upgrading campus facilities is essential for attracting students, and failure to do so could lead to lower enrollment and adverse financial impacts[124]. Compliance and Governance Risks - The company is incorporating artificial intelligence technologies into its programs and processes, which may present business, compliance, and reputational risks[118]. - The company faces significant risks associated with AI applications, including potential inaccuracies and biases that could adversely affect its reputation and financial results[119]. - Compliance with anti-corruption laws is critical, as violations could result in significant penalties and harm the company's reputation and financial health[130]. - The company has previously experienced material weaknesses in internal controls over financial reporting, which could affect the accuracy of financial statements and investor confidence[133]. Shareholder and Market Risks - As a public benefit corporation, the company may prioritize actions benefiting students and communities over short-term financial performance, which could negatively impact stockholder interests[142]. - Long-term benefits from initiatives aimed at students and communities may take time to materialize, potentially adversely affecting the company's financial condition and stock price[143]. - Sales of a large number of shares could lead to a decline in the market price of the company's common stock, complicating future capital raising efforts[144]. - The trading price of the company's common stock is subject to volatility, influenced by factors beyond its control, including analyst coverage and market perception[145]. - The company's amended certificate of incorporation may limit stockholder lawsuits, potentially increasing costs if disputes arise in other jurisdictions[146]. - Stockholders selling shares may incur a 30% Peruvian tax on gains, applicable if the company's value exceeds approximately $57 million[147]. - The company may face joint and several liabilities for unpaid Peruvian taxes resulting from share transactions, which could adversely affect its financial condition[148].

Revenue and Income - Revenue for Q4 2024 increased 3% to $423.4 million, with a 10% increase on an organic constant currency basis[5] - Operating income for Q4 2024 was $124.2 million, up from $110.0 million in Q4 2023[5] - Net income for Q4 2024 was $93.6 million, compared to $41.7 million in Q4 2023, driven by foreign currency exchange effects and higher operating income[5] - Adjusted EBITDA for Q4 2024 was $141.1 million, an increase from $131.3 million in Q4 2023[6] - For the full year 2024, revenue was $1,566.6 million, a 6% increase compared to 2023, with a 7% increase on an organic constant currency basis[8] - Net income for the full year 2024 was $296.4 million, up from $107.3 million in 2023, influenced by foreign currency exchange effects and a discrete tax benefit[8] - Total revenues for FY 2024 reached $1,566.6 million, a 6% increase from $1,484.3 million in FY 2023[30] - Operating income for the three months ended December 31, 2024, was $124.2 million, up 14.2% from $110.0 million in the same period of 2023[30] - Net income attributable to Laureate Education, Inc. for FY 2024 was $296.5 million, compared to $107.6 million in FY 2023, reflecting a significant increase of 175.5%[30] - Adjusted EBITDA for FY 2024 was $450.1 million, an 8% increase from $418.6 million in FY 2023[31] - Basic earnings per share for FY 2024 were $1.93, up from $0.69 in FY 2023, representing a growth of 179.7%[30] - Net income for the year ended December 31, 2024, was $296.4 million, an increase of $189.1 million compared to $107.3 million in 2023, representing a growth of 176.4%[33] - Adjusted EBITDA for the year ended December 31, 2024, was $450.1 million, up by $31.5 million from $418.6 million in 2023, reflecting a growth of 7.5%[36] - The company reported an adjusted net income of $208.5 million for 2024, translating to an adjusted EPS of $1.35[36] Enrollment Statistics - Total enrollments for 2024 increased by 5%, with new enrollments also up by 5%[7] - The company expects total enrollments in 2025 to be between 489,000 and 495,000, reflecting a growth of 4%-5%[18] - Total enrollments in Mexico increased by 7% year-over-year, reaching 258,500 as of December 31, 2024[28] - New enrollments in Peru increased by 6% year-over-year, totaling 92,100 for FY 2024[28] Cash and Assets - Cash and cash equivalents as of December 31, 2024, were $91.4 million, a slight increase from $89.4 million in the previous year[32] - Total assets decreased to $1,862.1 million from $2,125.6 million, a reduction of $263.5 million[32] - The company reported a net cash provided by operating activities of $232.7 million for 2024, a decrease of $18.1 million from $250.8 million in 2023[33] - Cash and cash equivalents at the end of the period increased to $97.9 million from $96.9 million, marking a $1.0 million increase[33] - The company’s net cash used in financing activities decreased to $166.9 million in 2024 from $201.9 million in 2023, a reduction of $35.0 million[33] Foreign Currency Effects - The company reported a foreign currency exchange gain of $50.7 million for the year ended December 31, 2024, compared to a loss of $75.7 million in 2023[30] - The company experienced a foreign currency exchange loss of $50.7 million for the year, compared to a gain of $75.7 million in 2023, indicating a negative change of $126.4 million[35] Depreciation and Working Capital - The depreciation and amortization expense for the year was $68.2 million, down from $69.6 million in 2023, a decrease of $1.4 million[35] - The company’s working capital, excluding tax accounts, showed a negative change of $36.8 million, moving from $(67.1) million in 2023 to $(103.9) million in 2024[33]

Group 1 - Laureate Education, Inc. (NASDAQ: LAUR) has outperformed the S&P 500 Index with a return of 51.60% over the past year [1] - The company is categorized as a mid-cap educational stock, indicating its market capitalization size [1] Group 2 - The article emphasizes the importance of taking proactive steps in investment rather than waiting for promotions or opportunities [1]