Critical Review: Laureate Education (NASDAQ:LAUR) and KinderCare Learning Companies (NYSE:KLC)

Laureate Education (NASDAQ:LAUR) and KinderCare Learning Companies (NYSE:KLC) are both consumer discretionary companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, valuation, dividends, profitability, institutional ownership, risk and analyst recommendations.

Profitability

This table compares Laureate Education and KinderCare Learning Companies’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Laureate Education	16.08%	22.07%	11.25%
KinderCare Learning Companies	-15.48%	7.27%	1.66%

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Laureate Education and KinderCare Learning Companies, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Laureate Education	0	2	4	0	2.67
KinderCare Learning Companies	3	6	1	0	1.80

Laureate Education currently has a consensus price target of $40.00, indicating a potential upside of 24.53%. KinderCare Learning Companies has a consensus price target of $4.43, indicating a potential upside of 9.39%. Given Laureate Education’s stronger consensus rating and higher probable upside, analysts clearly believe Laureate Education is more favorable than KinderCare Learning Companies.

Earnings & Valuation

This table compares Laureate Education and KinderCare Learning Companies”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Laureate Education	$1.70 billion	2.64	$281.63 million	$1.90	16.91
KinderCare Learning Companies	$2.73 billion	0.18	-$112.88 million	($0.95)	-4.26

Laureate Education has higher earnings, but lower revenue than KinderCare Learning Companies. KinderCare Learning Companies is trading at a lower price-to-earnings ratio than Laureate Education, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

96.3% of Laureate Education shares are held by institutional investors. 1.5% of Laureate Education shares are held by company insiders. Comparatively, 5.3% of KinderCare Learning Companies shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Volatility & Risk

Laureate Education has a beta of 0.4, suggesting that its stock price is 60% less volatile than the S&P 500. Comparatively, KinderCare Learning Companies has a beta of 4.61, suggesting that its stock price is 361% more volatile than the S&P 500.

Summary

Laureate Education beats KinderCare Learning Companies on 11 of the 14 factors compared between the two stocks.

About Laureate Education

Laureate Education, Inc., together with its subsidiaries, offers higher education programs and services to students through a network of universities and higher education institutions. The company provides a range of undergraduate and graduate degree programs in the areas of business and management, medicine and health sciences, and engineering and information technology through campus-based, online, and hybrid programs. It also offers specialized courses for technical and vocational training; and senior high school. Its services are provides in Mexico, Peru, and the United States. The company was formerly known as Sylvan Learning Systems, Inc. and changed its name to Laureate Education, Inc. in May 2004. Laureate Education, Inc. was founded in 1989 and is headquartered in Miami, Florida.

About KinderCare Learning Companies

KinderCare Learning Companies Inc. is a provider of high-quality early childhood education by center capacity. KinderCare Learning Companies Inc. is based in PORTLAND, Ore.