One-glance verdict
Undervalued
$283.88 our estimate vs market $158.52
Wall Street consensus: $194.00 (-31.7% lower than our fair-value estimate)
44% below our estimate, below the bear case
Fundamentals snapshot
Grand Canyon Education, Inc.
LOPE · NMS · Consumer Defensive · Education & Training Services
Current price
$158.52
52-week range
$134.27 - $217.98
Market cap
$4.13B
Balance sheet
Healthy
75,830.25x Strong cushion
Net cash $170.31M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
2 Risks
3 rewards · 2 risks
- Reward Revenue grew 3.3% last year.
- Reward Returns 31.0% on equity, ahead of 80% of its peers.
- Risk Operating margin compressed from 26.1% to 22.0% over 3 years.
- Risk Insider ownership is only 2.2% (peer median: 3.8%).
What this company does
Grand Canyon Education, Inc.
Grand Canyon Education provides technology and academic support services to universities, essentially selling the behind-the-scenes infrastructure that helps schools run smoothly and offer online courses. Their main income comes from partnering with these universities to manage their operations and student services, which matters because it shows they have a steady stream of income as long as their university partners keep using their services. This business model creates a stable revenue stream, like getting paid regularly for a service, rather than relying on one-off sales.
How the company got here
Grand Canyon Education (GCE) has a history rooted in Grand Canyon University (GCU), which was founded in 1949. The company, originally known as Significant Education, LLC, acquired GCU in 2004 when the university was facing financial difficulties. GCE went public in 2008, allowing it to raise capital for expansion. A pivotal moment came in 2018 when GCU transitioned to a nonprofit institution, and GCE became a dedicated education services provider, entering into a long-term agreement with GCU. In 2019, GCE acquired Orbis Education, further expanding its reach into healthcare education services.
What it actually does
Grand Canyon Education doesn't grant degrees itself; instead, it provides a comprehensive suite of services to other universities. Think of them as the behind-the-scenes support system that helps educational institutions run smoothly and grow. This includes everything from managing the technology that powers online classes to helping students with admissions and financial aid, and even handling marketing and administrative tasks. Their goal is to help partner universities operate more efficiently and effectively, ultimately supporting student success.
Grand Canyon University Services
This is the largest part of Grand Canyon Education's business, stemming from its long-standing relationship with Grand Canyon University (GCU). GCE provides GCU with essential technology services, like managing their learning platforms and IT infrastructure. They also offer academic support, such as curriculum development and faculty training, and handle student-facing services like admissions, financial aid, and counseling. Additionally, GCE manages marketing and communication efforts for GCU, as well as back-office functions like finance and human resources, making it a critical partner for the university's operations.
Orbis Education (Healthcare Programs)
Through its subsidiary Orbis Education, Grand Canyon Education partners with universities to launch and scale hybrid and online programs, with a particular focus on nursing and other healthcare fields. This involves not only helping with student recruitment but also providing the necessary infrastructure and operational support for these specialized programs. These hybrid programs often combine online learning with hands-on clinical experiences, aiming to prepare graduates for direct entry into the healthcare workforce and address industry demands.
Other University Partnerships
Beyond its core relationship with GCU and its focus on healthcare through Orbis, Grand Canyon Education also works with other university partners. These collaborations involve providing a similar range of services to help these institutions grow their online and hybrid program offerings. GCE seeks out private colleges, particularly in the Midwest and Northeast, that aim to expand their student populations, offering them the company's expertise in technology, marketing, and operational support to achieve their enrollment goals.
What management is betting on now
Grand Canyon Education's management is focused on several key strategies for future growth. A primary objective is to continue expanding the enrollment and offerings at Grand Canyon University, its largest partner. Simultaneously, they are investing in growing their healthcare education services through Orbis Education, aiming to increase the number of hybrid program sites. The company is also actively seeking to add and deepen relationships with new university partners, diversifying its client base while leveraging its established service model and technological capabilities.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q3
$-38.95M
FY2024 Q4
$126.07M
FY2025 Q1
$58.68M
FY2025 Q2
$115.39M
FY2025 Q3
$-58.30M
FY2025 Q4
$122.87M
FY2026 Q1
$80.08M
FY2026 Q2
$97.91M
Revenue
$264.05M
Net income
$45.85M
Diluted EPS
1.75
Operating cash flow
$108.65M
Free cash flow
$97.91M
Fetching…
Sources
Revenue
$308.76M
Net income
$75.35M
Diluted EPS
2.80
Operating cash flow
$88.21M
Free cash flow
$80.08M
Fetching…
Sources
Revenue
$308.12M
Net income
$86.73M
Diluted EPS
3.13
Operating cash flow
$130.49M
Free cash flow
$122.87M
Fetching…
Sources
Revenue
$261.14M
Net income
$16.27M
Diluted EPS
0.58
Operating cash flow
$-48.63M
Free cash flow
$-58.30M
Fetching…
Sources
Revenue
$247.50M
Net income
$41.55M
Diluted EPS
1.48
Operating cash flow
$124.01M
Free cash flow
$115.39M
Fetching…
Sources
Revenue
$289.31M
Net income
$71.62M
Diluted EPS
2.52
Operating cash flow
$67.63M
Free cash flow
$58.68M
Fetching…
Sources
Revenue
$292.57M
Net income
$81.88M
Diluted EPS
2.83
Operating cash flow
$135.82M
Free cash flow
$126.07M
Fetching…
Sources
Revenue
$238.29M
Net income
$41.47M
Diluted EPS
1.42
Operating cash flow
$-29.39M
Free cash flow
$-38.95M
Fetching…
Sources
Is it cheap or expensive?
Fair value $283.88 vs current price $158.52
Wall Street consensus is the average analyst price target: $194.00 (-31.7% lower than our fair-value estimate).
Our most-likely fair value is $283.88 a share — about 79.1% above today's price of $158.52, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Healthy
Net cash $170.3M - more cash than debt. Interest coverage 75830.2x.
Net debt
$-170.31M
Interest coverage
75,830.25x
Grand Canyon Education, Inc.'s profit covers its interest bill about 75830.2 times over. which is stronger than every peer shown here.
Healthy
Worse cushion
Baseline
Better cushion
LOPE
BASELINE
Grand Canyon Education, Inc.
Total debt $104.21M Interest coverage 75,830.25x This is the baseline the peer rows are being compared against.
Total debt $619.04M Interest coverage 38.27x -100% vs LOPE Carries about 1981.4x less debt cushion than LOPE.
Total debt $113.77M Interest coverage 34.88x -100% vs LOPE Carries about 2174.0x less debt cushion than LOPE.
Total debt $153.47M Interest coverage 12.73x -100% vs LOPE Carries about 5955.5x less debt cushion than LOPE.
What you should know
The case for and against LOPE
3 Rewards
2 Risks
Rewards
-
Revenue grew 3.3% last year.
-
Returns 31.0% on equity, ahead of 80% of its peers.
-
Free cash flow was positive in 10/10 years.
Risks
-
Operating margin compressed from 26.1% to 22.0% over 3 years.
-
Insider ownership is only 2.2% (peer median: 3.8%).
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
19.45x
Forward P/E
14.02x
P/B
6.13x
P/S
3.62x
EV/EBITDA
11.05x
PEG ratio
0.94x
Profitability
How much profit each dollar creates
Gross margin
53.3%
Operating margin
22.0%
Net margin
19.6%
ROE
31.0%
ROA
20.4%
Health
Liquidity and balance-sheet strength
Debt / equity
0.16x
Current ratio
2.82x
Quick ratio
2.69x
Total debt
$104.21M
Total cash
$274.53M
Growth
How the business has been compounding
Revenue TTM
$1.14B
Revenue 5Y CAGR
5.4%
EPS TTM
8.15
EPS 5Y CAGR
10.4%
Cash flow
How much cash the business throws off
Operating CF TTM
$278.71M
Free CF TTM
$238.65M
FCF margin
20.9%
Dividend
Shareholder payout
Yield
0.0%
Payout ratio
0.0%
Last ex-div date
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