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Grand Canyon Education Inc – Colleges, Universities, and Professional Schools
Grand Canyon Education (GCE), incorporated in 2008, is a publicly traded education services company that currently provides services to 25 university partners. GCE is uniquely positioned in the education services industry in that its leadership has 30 years of proven expertise in providing a full array of support services in the post-secondary education sector and has developed significant technological solutions, infrastructure and operational processes to provide superior service in these areas on a large scale. GCE provides services that support students, faculty and staff of partner institutions such as marketing, strategic enrollment management, counseling services, financial services, technology, technical support, compliance, human resources, classroom operations, curriculum development, faculty recruitment and training, among others.
Analysis Results
Intrinsic Value $265.66
Latest Price $107.81
Relative Value 59% undervalued
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Cash Flow (Millions)
Analysis Parameters
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Analysis Details
Growth Rate Projection

An exponential growth model was fit to the past cash flow data, giving more weight to more recent years. This model determined a growth rate estimate of 15.4%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 6.6%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 15.4%, the cash flows for the next 5 years are projected.

The present value of each year's flow is adjusted to present value using the discount rate.

Year Future flow (million) Present value (million)
2022 253 237
2023 292 257
2024 337 278
2025 389 302
2026 449 327
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 10100 million. This corresponds to a present value of 6870 million.

Intrinsic Value Per Share

The total present value of the projected cash flows is 1400 million. Adding in the terminal value gives a total present value of 8270 million.

There are presently 31.1 million outstanding shares, so the intrinsic value per share is 265.66.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 681,045,000
Current Cash 600,941,000
Current Liabilities 97,944,000
Current Debt 0
Non-Cash Working Capital (NCWC) -17,840,000
Change in NCWC -9,399,000
EBIT 282,190,000
Tax Provision 70,945,000
Depreciation and Amortization 30,413,000
Capital Expenditure -28,875,000
Unlevered Free Cash Flow 213,898,470
Current Assets 333,742,000
Current Cash 256,609,000
Current Liabilities 118,718,000
Current Debt 33,144,000
Non-Cash Working Capital (NCWC) -8,441,000
Change in NCWC -10,826,000
EBIT 277,437,000
Tax Provision 75,944,000
Depreciation and Amortization 29,652,000
Capital Expenditure -29,418,000
Unlevered Free Cash Flow 203,599,290
Current Assets 208,344,000
Current Cash 143,873,000
Current Liabilities 95,230,000
Current Debt 33,144,000
Non-Cash Working Capital (NCWC) 2,385,000
Change in NCWC -73,683,000
EBIT 269,097,000
Tax Provision 58,327,000
Depreciation and Amortization 18,696,000
Capital Expenditure -22,391,000
Unlevered Free Cash Flow 142,284,285
Current Assets 309,466,000
Current Cash 189,348,000
Current Liabilities 80,518,000
Current Debt 36,468,000
Non-Cash Working Capital (NCWC) 76,068,000
Change in NCWC 175,395,000
EBIT 276,519,000
Tax Provision 57,989,000
Depreciation and Amortization 35,673,000
Capital Expenditure -124,853,000
Unlevered Free Cash Flow 306,862,709
Current Assets 374,862,000
Current Cash 242,745,000
Current Liabilities 238,135,000
Current Debt 6,691,000
Non-Cash Working Capital (NCWC) -99,327,000
Change in NCWC -25,665,000
EBIT 282,754,000
Tax Provision 80,209,000
Depreciation and Amortization 54,228,000
Capital Expenditure -123,954,000
Unlevered Free Cash Flow 107,372,961
Current Assets 230,068,000
Current Cash 108,572,000
Current Liabilities 226,794,000
Current Debt 31,636,000
Non-Cash Working Capital (NCWC) -73,662,000
Change in NCWC -7,395,000
EBIT 240,726,000
Tax Provision 87,610,000
Depreciation and Amortization 45,683,000
Capital Expenditure -239,019,000
Unlevered Free Cash Flow -49,322,497
Current Assets 221,345,000
Current Cash 106,400,000
Current Liabilities 188,534,000
Current Debt 7,322,000
Non-Cash Working Capital (NCWC) -66,267,000
Change in NCWC 4,714,000
EBIT 210,361,000
Tax Provision 77,596,000
Depreciation and Amortization 35,675,000
Capital Expenditure -204,718,000
Unlevered Free Cash Flow -32,066,686
Current Assets 267,045,000
Current Cash 166,022,000
Current Liabilities 178,711,000
Current Debt 6,707,000
Non-Cash Working Capital (NCWC) -70,981,000
Change in NCWC -11,513,000
EBIT 180,815,000
Tax Provision 68,232,000
Depreciation and Amortization 29,473,000
Capital Expenditure -168,646,000
Unlevered Free Cash Flow -38,527,129
Current Assets 263,703,000
Current Cash 164,244,000
Current Liabilities 165,623,000
Current Debt 6,696,000
Non-Cash Working Capital (NCWC) -59,468,000
Change in NCWC -22,492,000
EBIT 143,276,000
Tax Provision 56,184,000
Depreciation and Amortization 25,437,000
Capital Expenditure -93,490,000
Unlevered Free Cash Flow -2,825,221
Current Assets 214,174,000
Current Cash 105,111,000
Current Liabilities 152,727,000
Current Debt 6,688,000
Non-Cash Working Capital (NCWC) -36,976,000
Change in NCWC -11,905,000
EBIT 114,052,000
Tax Provision 43,977,000
Depreciation and Amortization 21,923,000
Capital Expenditure -104,876,000
Unlevered Free Cash Flow -25,026,489

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