Taking Stock of Grand Canyon Education (LOPE) After Buyback Boost and Grand Canyon University’s Nonprofit Recognition
Grand Canyon Education (LOPE) just gave investors a lot to chew on, pairing a fresh $300 million boost to its buyback program with a long awaited nonprofit recognition win for Grand Canyon University.
See our latest analysis for Grand Canyon Education.
The buyback expansion and GCU’s nonprofit win arrive after a choppy stretch, with a recent rebound helping the 1 year total shareholder return of 1.64% but leaving momentum still rebuilding after a weaker 90 day share price return.
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But with the shares still trading at a steep discount to analyst targets and intrinsic estimates despite slowing profitability, is Grand Canyon Education quietly undervalued today, or is the market already pricing in a full nonprofit fueled growth story?
Most Popular Narrative: 25.5% Undervalued
With Grand Canyon Education last closing at $165.89 against a narrative fair value near $223, the gap hinges on disciplined margin expansion and steady top line growth.
Analysts assume that profit margins will increase from 22.2% today to 23.6% in 3 years time.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 20.5x on those 2028 earnings, down from 24.1x today.
Want to see what powers that higher fair value? The narrative leans on rising earnings, fatter margins, and a rerated multiple. Curious how far those assumptions stretch?
Result: Fair Value of $222.67 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, slowing traditional enrollments and rising legal and regulatory costs could still squeeze margins, challenging the rosy margin expansion story underpinning today’s valuation.
Find out about the key risks to this Grand Canyon Education narrative.
Build Your Own Grand Canyon Education Narrative
If you see the story differently or want to dig into the numbers yourself, you can build a custom view in minutes: Do it your way
A good starting point is our analysis highlighting 3 key rewards investors are optimistic about regarding Grand Canyon Education.
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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.
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