Analyst, Schoolhouse Solutions

Daniel Su

Analyst

Schoolhouse Solutions

Schoolhouse is a strategy and research provider for the Education sector. We publish differentiated reports and bespoke research on the sector, focused on private and public companies in Asia-Pacific. Our team has decades of experience working with Education companies ranging from K-12 to Tertiary and Edtech.

Strategy and Research Provider

Thematic (Sector/Industry)

<ul>
<li>The education sector remains resilient despite headline privatisations, with market cap only slightly down to US$142bn after the removal of <a href="https://www.smartkarma.com/entities/powerschool-holdings-inc" target="_blank" data-smartkarma-citation="entities:36946:1" rel="noopener">PowerSchool Holdings (PWSC US)</a> and <a href="https://www.smartkarma.com/entities/instructure-holdings-inc" target="_blank" data-smartkarma-citation="entities:26502:1" rel="noopener">Instructure Holdings (INST US)</a>.</li>
<li>AI disruption is reshaping the landscape, with key players like <a href="https://www.smartkarma.com/entities/chegg-inc" target="_blank" data-smartkarma-citation="entities:10114:1" rel="noopener">Chegg Inc (CHGG US)</a> collapsing while innovators like <a href="https://www.smartkarma.com/entities/duolingo-inc" target="_blank" data-smartkarma-citation="entities:33531:1" rel="noopener">Duolingo (DUOL US)</a> surge, highlighting a potential shift in investor focus.</li>
<li>M&amp;A and IPO activity is reawakening, with <a href="https://www.smartkarma.com/entities/kindercare-learning-cos-inc" target="_blank" data-smartkarma-citation="entities:35721:1" rel="noopener">KinderCare Learning (KLC US)</a> 's IPO, India's robust upcoming pipeline, and renewed private equity interest pointing to a cyclical upturn.</li>
</ul>


The education sector remains resilient despite headline privatisations, with market cap only slightly down to US$142bn after the removal of PowerSchool Holdings (PWSC US) and Instructure Holdings (INST US).
AI disruption is reshaping the landscape, with key players like Chegg Inc (CHGG US) collapsing while innovators like Duolingo (DUOL US) surge, highlighting a potential shift in investor focus.
M&amp;A and IPO activity is reawakening, with KinderCare Learning (KLC US) 's IPO, India's robust upcoming pipeline, and renewed private equity interest pointing to a cyclical upturn.


Valuations, Visas & Venture Pullback: An Equity + M&A Overview of the Education Sector in Q1 2025

Korea/Asia, Events, IPOs, Douglas Research Advisory

Douglas Kim

Korea/Asia, Events, IPOs

Equity Bottom-Up

<ul>
<li>We believe that Upstart's share price has been excessively oversold since October 2021. Since its highs in October 2021, Upstart's share price has declined significantly by nearly 72%.</li>
<li>The combination of buying back shares, more attractive valuations, and a much stronger sales growth than its peers is likely to result in Upstart outperforming the market this year.</li>
<li>Our base case valuation of Upstart is implied market cap of $13.8 billion and target price of $165 per share, which is 47% higher than current share price.</li>
</ul>


We believe that Upstart's share price has been excessively oversold since October 2021. Since its highs in October 2021, Upstart's share price has declined significantly by nearly 72%.
The combination of buying back shares, more attractive valuations, and a much stronger sales growth than its peers is likely to result in Upstart outperforming the market this year.
Our base case valuation of Upstart is implied market cap of $13.8 billion and target price of $165 per share, which is 47% higher than current share price.


Upstart Holdings: Focus on the Share Buyback & Outstanding Growth of AI Driven Lending Platform

Equity Capital Markets

Upstart Holdings  / Equity Capital Markets

<p>Our base case valuation of Upstart Holdings is EV of $3,153 million, implied market cap of $3,236 million, and implied price of $35.8 per share, which would be 63% higher than the high end of the IPO price range of $22. Given the attractive upside, we have a positive view of the Upstart IPO. Our base case valuation uses our estimated sales of $321 million in 2021 and a 9.8x EV/S multiple. The 9.8x EV/S multiple was derived from the average of the comps' 2021 EV/Sales average and median multiples. </p><p>Upstart's core business uses the cloud-based artificial intelligence lending platform and aims to provide lower interest rates, higher approval rates, and a smoother digital experience. Since the company's inception, its bank partners have originated more than 0.62 million personal loans that have generated over 9 million repayments. As of the end of September 2020, about 70% of the Upstart-powered loans were entirely automated. </p>

Our base case valuation of Upstart Holdings is EV of $3,153 million, implied market cap of $3,236 million, and implied price of $35.8 per share, which would be 63% higher than the high end of the IPO price range of $22. Given the attractive upside, we have a positive view of the Upstart IPO. Our base case valuation uses our estimated sales of $321 million in 2021 and a 9.8x EV/S multiple. The 9.8x EV/S multiple was derived from the average of the comps' 2021 EV/Sales average and median multiples. Upstart's core business uses the cloud-based artificial intelligence lending platform and aims to provide lower interest rates, higher approval rates, and a smoother digital experience. Since the company's inception, its bank partners have originated more than 0.62 million personal loans that have generated over 9 million repayments. As of the end of September 2020, about 70% of the Upstart-powered loans were entirely automated. 

United States

Nelnet, Inc. is a consumer finance company that provides products and services to participants in the education finance process.  The Company originates, holds, and services education loans and offers a broad range of financial services and technology-based products, including student loan origination and lending, student loan, and guarantee services.

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Nelnet Inc Cl A (NNI US)

Valuations, Visas & Venture Pullback: An Equity + M&A Overview of the Education Sector in Q1 2025

Education sector resilient post-privatisations, AI disruption reshaping landscape, M&A/IPO activity reawakening - potential shift in investor focus.

Daniel Su

Upstart IPO Valuation Analysis

Our base case valuation of Upstart Holdings is implied market cap of $3,236 million and implied price of $35.8 per share, which would be 63% higher...

Douglas Kim

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52-week Range

Market Cap (USDm)

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Valuations, Visas & Venture Pullback: An Equity + M&A Overview of the Education Sector in Q1 2025

​Education sector resilient post-privatisations, AI disruption reshaping landscape, M&A/IPO activity reawakening - potential shift in investor focus.

Daniel Su

Upstart Holdings: Focus on the Share Buyback & Outstanding Growth of AI Driven Lending Platform

The combination of buying back shares, more attractive valuations, and a much stronger sales growth than its peers is likely to result in Upstart...

Douglas Kim

Upstart IPO Valuation Analysis

Our base case valuation of Upstart Holdings is implied market cap of $3,236 million and implied price of $35.8 per share, which would be 63% higher...

Douglas Kim

Education sector resilient post-privatisations, AI disruption reshaping landscape, M&A/IPO activity reawakening - potential shift in investor focus.