LAUR

Laureate Education is now a focused, profitable higher-education operator running five degree-granting institutions in Mexico and Peru with roughly 497,700 students. The investment thesis rests on a structural supply/demand imbalance: a growing middle class and limited public-university capacity in both markets, where private institutions account for ~39% of the market in Mexico and ~76% in Peru, against largely private-pay revenue (no material government loan programs). FY2025 delivered solid results — revenue grew 8.6% to $1.70B, driven primarily by higher organic enrollment (+$92.4M) and favorable pricing/mix (+$40.5M), and operating income rose 15.3% to $431M for a strong 25.3% operating margin. The slight 5.0% dip in net income was not operational; it reflected a $77.1M swing in non-operating (largely FX-related) items, while operating income at both the Mexico and Peru segments grew.

The financial quality is high. Return on equity is 23.7%, the balance sheet is lightly levered (long-term debt of just $73.1M; liabilities/equity 0.86x) and net interest expense fell to only $3.6M on lower debt. Cash generation is excellent: operating cash flow jumped 57.3% to $366M against $103M of capex, funding aggressive capital return — $215M of buybacks (up 110.8%) that shrank the share count 5.3%. Equity grew 23.8% and cash rose 60.6% to $147M.