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01/11 07:56
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Strong financial metrics with EPS and revenue beats, optimistic guidance, and a robust shareholder return plan support a positive outlook. Despite some concerns in Mexico and Peru, the company's strategic initiatives and increased guidance for 2024 outweigh these. The market cap suggests moderate sensitivity, leading to a predicted stock price increase of 2% to 8% over the next two weeks.
EPS $0.615, up from $0.42 year-over-year, beating expectations.
Revenue (Q4 2024) $423 million, up 10% year-over-year on an organic constant currency basis, driven by a 5% increase in total enrollment volume and favorable price/mix.
Adjusted EBITDA (Q4 2024) $141 million, up 14% year-over-year on an organic constant currency basis, with strong flow-through margins on revenue growth.
Full Year Revenue (2024) $1.567 billion, up 7% year-over-year on an organic constant currency basis.
Full Year Adjusted EBITDA (2024) $450 million, up 9% year-over-year, resulting in an adjusted EBITDA margin of 28.7%, a new historic high.
Full Year Net Income (2024) $296 million, resulting in earnings per share of $1.92.
Adjusted Net Income (2024) $209 million.
Adjusted Earnings Per Share (2024) $1.35 per share.
Revenue Growth (Mexico, Full Year 2024) 10% year-over-year, driven by an 8% increase in average total enrollments and 2% from price/mix.
Adjusted EBITDA Growth (Mexico, Full Year 2024) 19% year-over-year, expanding margins by 176 basis points to 24.5%.
Revenue Growth (Peru, Full Year 2024) 4% year-over-year, driven by a 2% increase in average total enrollments and 2% from price/mix.
Adjusted EBITDA Growth (Peru, Full Year 2024) Decreased 1% year-over-year, with a decline in margins due to enhanced discounts and higher bad debt provisioning.
Cash Position (End of 2024) $91 million in cash and $102 million in gross debt, resulting in a net debt position of $11 million.
Capital Returned to Shareholders (2024) More than $100 million, with $98 million of unused authorization remaining.
Total Enrollments (Full Year 2024) Increased 5% versus prior year.
New Medical Schools: Opened six new medical schools at campuses in Mexico and Peru.
New Dental Schools: Opened two new dental schools.
New Veterinary School: Opened one new veterinary school.
Market Positioning in Mexico and Peru: Laureate is the largest higher education provider in both Mexico and Peru.
Brand Recognition in Peru: UPC ranked number one education brand in Peru for the fourth consecutive year.
Brand Recognition in Mexico: UVM ranked number two best private university in Mexico according to Reader’s Digest.
Capital Returned to Shareholders: Returned over $100 million of capital to shareholders in 2024.
Net Debt Position: Ended the year essentially net debt free.
Adjusted EBITDA Margin: Achieved a historic high adjusted EBITDA margin of 28.7%.
Campus Expansion: Plans to build and outfit four new campuses for value brands, with two expected to open in 2025.
Digital Education Investment: Continuing investment in digital education to expand reach.
Campus Consolidation Initiatives: Progress on campus consolidation initiatives in Mexico, expecting a one-time revenue loss of $13 million in 2025.
Geopolitical Risks: Despite some geopolitical uncertainties in Mexico, particularly the recent tariff threats and related trade complications for the United States, the company remains cautiously optimistic.
Foreign Currency Translation Risks: The company anticipates significant foreign currency translation headwinds in their 2025 reported financial results due to expected volatility in the Mexican peso.
Revenue Guidance Risks: The guidance indicates that reported revenues for 2025 will be flat to slightly down year-over-year, primarily due to the impact of currency translation and campus consolidation initiatives.
Campus Consolidation Impact: The company expects a one-time revenue loss in 2025 of $13 million due to campus consolidation initiatives in Mexico, impacting year-over-year revenue growth by approximately 1%.
Economic Factors in Peru: While Peru's economy is recovering, the company is monitoring political and external developments that could affect growth.
Bad Debt Provisioning: Increased levels of bad debt provisioning were noted, particularly in Peru, as a result of softer macroeconomic conditions in the first half of the year.
New Campus Openings: In 2024, Laureate opened six new medical schools, two dental schools, and one veterinary school in Mexico and Peru.
Academic Excellence Recognition: All universities in Mexico and Peru achieved a five-star rating from QSR for employability, online learning, inclusiveness, and social impact.
Shareholder Returns: Returned over $100 million of capital to shareholders in 2024, with nearly $3 billion returned since 2019.
Campus Consolidation Initiatives: Progress on campus consolidation in Mexico is expected to result in a one-time revenue loss of $13 million in 2025.
Digital Education Investment: Continued investment in digital education to expand reach and meet growing demand.
2025 Revenue Guidance: Expected revenue range of $1.545 billion to $1.570 billion, reflecting flat to down 1% performance on an as-reported basis.
2025 Adjusted EBITDA Guidance: Expected adjusted EBITDA range of $467 million to $477 million, reflecting growth of 4% to 6% on an as-reported basis.
2025 Enrollment Guidance: Total enrollments expected to be in the range of 489,000 to 495,000 students, reflecting growth of 4% to 5%.
2025 Cash Flow Conversion: Expected adjusted EBITDA to unlevered free cash flow conversion of approximately 50%.
Q1 2025 Revenue Guidance: Expected revenue between $221 million and $226 million, with adjusted EBITDA between negative $7 million to negative $4 million.
Shareholder Return: In 2024, Laureate Education returned over $100 million of capital to shareholders through share repurchases. The company has returned nearly $3 billion of capital to shareholders since 2019 through share repurchases, cash distributions, and cash dividends.
Share Repurchase Program: During 2024, Laureate Education executed share repurchases totaling $102 million and has $98 million of unused authorization remaining.
The earnings call reveals strong financial performance with revenue and adjusted EBITDA growth, despite some challenges like campus closures in Mexico and currency fluctuations. The increased stock repurchase program, alongside a history of returning capital to shareholders, adds to the positive outlook. The Q&A session provided clarity on growth strategies, particularly in Peru and Mexico, with no unclear management responses. With a market cap of approximately $2.2 billion, the stock is likely to experience a positive movement of 2% to 8% over the next two weeks.
The earnings call presents a positive outlook with strong financial performance, including a 9% revenue growth and improved EBITDA margins. The Q&A section reveals positive enrollment trends and successful campus expansions. Although there are risks, such as currency volatility and regulatory changes, these are common industry challenges. The share repurchase program and positive guidance further bolster sentiment. Given the company's market cap of $2.2 billion, the stock is likely to see a positive movement of 2% to 8% over the next two weeks.
The earnings call reveals mixed signals. Positive aspects include a 10% revenue increase, strong enrollment growth, and robust digital course expansion. However, the flat revenue guidance and a net loss raise concerns. While stock repurchases and a strong cash position are positive, macroeconomic uncertainties and unclear guidance on FX rates and future enrollments temper enthusiasm. Given the company's mid-sized market cap, the stock price is likely to remain stable, with a neutral movement expected over the next two weeks.
Strong financial metrics with EPS and revenue beats, optimistic guidance, and a robust shareholder return plan support a positive outlook. Despite some concerns in Mexico and Peru, the company's strategic initiatives and increased guidance for 2024 outweigh these. The market cap suggests moderate sensitivity, leading to a predicted stock price increase of 2% to 8% over the next two weeks.
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