William Blair & Company initiated research coverage of Laureate Education, Inc. (LAUR $13.43), one of the largest education services providers in the world, focused on higher education in nearly every region around the globe.
Analyst estimated the company would generate EBITDA of $692 million on revenue of $4.185 billion in 2017, followed by EBITDA of $794 million on revenue of $4.222 billion in 2018.
“Higher education is an attractive, growing global market supported by employment trends and government initiatives to drive participation rates higher,” Dobell said. “We believe Laureate can increase enrollments well above the market growth rate by capturing share from both for- and nonprofit institutions that are unable to keep up with or adapt to market trends, shifts in demand dynamics, investments and innovations in new programs, and delivery modalities. Laureate has positioned its programs and degrees in high-growth areas that benefit from the continuing transition from industrial to service economies and the increasing integration of technology into the workplace. We view operational complexity, recent growth issues in important markets, and uncertainty about regulatory and political factors as likely headwinds in the near term. With consistent execution, particularly on new and total enrollment trends from Latin America and GPS segments in 2017 and 2018, we believe these headwinds could abate and raise the market’s perception of medium-term growth.”
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Current Ratings Distribution (as of 2/28/17)
Outperform (Buy): 59%
Market Perform (Hold): 34%
Underperform (Sell): 1%
Inv. Banking Relationships*
Outperform (Buy): 9%
Market Perform (Hold): 3%
Underperform (Sell): 0%
* Percentage of companies in each rating category that are investment banking clients, defined as companies for which William Blair has received compensation for investment banking services within the past 12 months.
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