Are Consumer Discretionary Stocks Lagging Laureate Education (LAUR) This Year?

Laureate Education (LAUR) has significantly outperformed its peers year-to-date, posting a 50.3% return against the Consumer Discretionary sector's 11.5% and the Schools industry's 6.7%. This strong performance is underpinned by a Zacks Rank #1 (Strong Buy) and a 3.3% increase in its full-year earnings consensus estimate over the last 90 days, reflecting improving analyst sentiment. Investors should note LAUR's robust momentum within the education sub-sector, alongside Lincoln Educational Services (LINC) which also outperformed with an 18.9% YTD return.

Analysis

Laureate Education (LAUR) has demonstrated significant market outperformance year-to-date, delivering a 50.3% return that substantially exceeds both the Consumer Discretionary sector's average gain of 11.5% and the Schools industry's 6.7% return. This strong price momentum is underpinned by improving fundamentals, as evidenced by a 3.3% upward revision in the Zacks Consensus Estimate for LAUR's full-year earnings over the past 90 days. The positive analyst sentiment has earned the stock a Zacks Rank of #1 (Strong Buy), a quantitative indicator suggesting a continued positive earnings outlook. For context, peer firm Lincoln Educational Services (LINC) has also outperformed with an 18.9% year-to-date return, backed by a 4.9% increase in its consensus EPS estimate and a Zacks Rank #2 (Buy). The strong performance of both LAUR and LINC is particularly noteworthy given the relatively weak performance of their broader industry group, highlighting them as specific standouts driven by favorable earnings estimate trends.

Key Decisions for Investors

• Given Laureate Education's #1 (Strong Buy) rating and positive earnings revisions, investors may consider it a candidate for a bullish position, as these factors signal potential for continued outperformance in the near term.
• The investment thesis is heavily reliant on the positive earnings estimate trend; therefore, investors should closely monitor future revisions to the Zacks Consensus Estimate for any change in analyst sentiment.
• The significant divergence in performance between LAUR (50.3% YTD) and its industry average (6.7% YTD) indicates that a stock-specific approach is more prudent than a broad allocation to the Schools industry group.
• For those seeking exposure to the education sub-sector, Lincoln Educational Services (LINC) presents a viable alternative, also showing positive momentum and a 'Buy' rating, although with less pronounced year-to-date returns compared to LAUR.