Adtalem Global Education: Assessing the Recovery Potential

After a steep decline that saw its value drop by nearly 37% in a single month, shares of the education provider Adtalem Global Education have staged a notable five-day rally. This prompts a critical question for investors: is this a fleeting rebound or the beginning of a durable recovery? Market analysts are pointing to significant, untapped upside potential based on the firm's fundamentals.

A compelling valuation case is at the heart of the bullish thesis. The stock currently trades at a price-to-earnings ratio of 14.05, positioning it slightly below the industry average. More strikingly, discounted cash flow (DCF) models suggest an intrinsic value of approximately $180.70 per share. This indicates the market may be undervaluing the company by close to 50%, even after the recent positive price movement. The central challenge is whether this discrepancy will close, allowing the equity to fully recoup its substantial monthly losses.

Should investors sell immediately? Or is it worth buying Adtalem Global Education?

Operational Strength Fuels Optimism

The recent share price momentum is supported by solid operational performance. For the first quarter of fiscal 2026, Adtalem reported a 10.8% increase in revenue. More impressively, its adjusted earnings per share surged by 35.7%. A key driver is sustained enrollment growth; both Chamberlain University and Walden University have reported rising student numbers for nine consecutive quarters. Walden University, in fact, has achieved a record-high enrollment level.

Analyst Consensus Points to Substantial Upside

Wall Street's outlook reinforces the opportunity. The consensus price target among analysts stands at $166.50, implying a potential upside of over 76% from recent trading levels. This optimism is grounded in recent estimate revisions. Over the past 30 days, earnings projections for fiscal years 2026 and 2027 have been revised upward. Furthermore, the company has a track record of exceeding analyst expectations, having beaten consensus estimates in each of the last four quarters by an average margin of 17.4%.