Is Global Education overvalued or undervalued?

Valuation Metrics Indicate Elevated Pricing

As of 1 December 2025, Global Education’s valuation grade moved to expensive, reflecting a notable rise in its price multiples. The company’s price-to-earnings (PE) ratio stands at 21.46, which is relatively high compared to many peers in the education sector. Its price-to-book value ratio is 3.96, signalling that the market values the company at nearly four times its net asset value. Additionally, the enterprise value to EBIT (EV/EBIT) ratio is 19.76, and EV to EBITDA is 16.70, both suggesting a premium valuation relative to earnings and cash flow.

These multiples indicate that investors are willing to pay a significant premium for Global Education’s earnings and operational cash flow, which often reflects expectations of strong future growth or superior profitability. However, the PEG ratio is reported as zero, which may imply either a lack of meaningful earnings growth estimates or an anomaly in calculation, warranting cautious interpretation.

Strong Profitability Supports Premium Valuation

Global Education’s return on capital employed (ROCE) is an impressive 20.43%, and return on equity (ROE) is 18.45%. These figures demonstrate efficient use of capital and solid profitability, which can justify a higher valuation multiple. The company also offers a modest dividend yield of 1.08%, providing some income to investors alongside capital appreciation potential.

Such profitability metrics are favourable compared to many peers, some of which are loss-making or carry significantly higher valuation multiples without matching returns. This profitability strength partly explains why Global Education commands a premium valuation in the market.

Peer Comparison Highlights Relative Valuation

When compared to its peers in the education and consumer services sector, Global Education’s valuation is expensive but not extreme. Several competitors such as Shanti Education and Mobavenue AI Technologies are classified as very expensive, with PE ratios soaring into the hundreds and EV/EBITDA multiples far exceeding Global Education’s. Conversely, some peers like Zee Learn and CP Capital are considered very attractive, trading at much lower multiples.

Notably, several companies in the sector are loss-making or have risky financial profiles, which makes Global Education’s profitability and moderate dividend yield stand out. This relative strength supports the premium valuation but also suggests that investors should weigh the company’s growth prospects against the elevated price.

Market Performance and Price Momentum

Global Education’s stock price has demonstrated strong momentum recently. Over the past week, the stock surged 13.38%, significantly outperforming the Sensex’s 0.83% gain. Over one month, the stock returned 31.1%, dwarfing the benchmark’s 1.76%. Year-to-date, the stock has appreciated nearly 30%, compared to Sensex’s 10.7%. Even over the past year, the stock’s 22.47% return outpaces the Sensex’s 8.47%.

However, over longer horizons such as three years, the stock’s return of 0.78% lags the Sensex’s 39.14%, indicating that recent gains have been more pronounced than sustained long-term outperformance. The five-year return of 136.28% does exceed the Sensex’s 99.68%, reflecting solid growth over that period.

Price Range and Trading Activity

The current price of ₹92.62 is close to its 52-week high of ₹94.00, suggesting the stock is trading near peak levels for the year. The 52-week low was ₹41.00, indicating significant appreciation over the past year. Today’s trading range between ₹84.00 and ₹94.00 reflects active investor interest and volatility around the upper price band.

Conclusion: Valuation Reflects Growth and Profitability but Warrants Caution

Global Education’s current valuation is expensive relative to historical grades and many peers, driven by strong profitability and recent price momentum. The company’s robust ROCE and ROE justify a premium to some extent, but the elevated PE and EV multiples suggest the market is pricing in continued growth and operational excellence.

Investors should consider that while the stock has outperformed the benchmark in the short to medium term, its long-term returns have been more modest. The proximity to 52-week highs also indicates limited upside from current levels unless the company delivers on growth expectations.

In summary, Global Education appears to be overvalued based on traditional valuation metrics, though its strong fundamentals and sector positioning provide some support. Cautious investors may want to monitor upcoming earnings and sector developments closely before committing fresh capital.

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