Valuation Multiples for Education Companies
An analysis of 30 public education companies trading on U.S. exchanges, including online course providers such as Udemy, Coursera, and Duolingo, revealed the following median valuation multiples for 2024: a revenue multiple of 1.5x, an EBITDA multiple of 7.2x, and a P/E multiple of 15.6x.
These figures suggest that while the sector maintains moderate valuations, it faces pressures from declining investments and increased competition from free AI-driven educational tools.
Compared to other industries, these multiples are relatively average, reflecting the sector’s transitional phase.
Education Company Margins
In 2024, the gross margin for education product companies stood at 53%, with an EBITDA margin of 17% and a net profit margin of 11%.
These healthy margins can be attributed to the scalability of digital platforms, which allow companies to serve a large user base with relatively low incremental costs.
The high gross margin indicates efficient cost management in delivering educational content, while the net profit margin reflects the sector’s ability to convert revenues into actual profit effectively.
Education Industry Outlook 2025
Looking ahead to 2025, the education industry is expected to continue its evolution, with a focus on integrating advanced technologies to enhance learning experiences.
Despite the decline in traditional EdTech investments, companies that adapt by incorporating AI and offering personalized learning solutions are likely to attract renewed investor interest.
The emphasis will be on creating value-added services that differentiate from free offerings, ensuring sustainable growth in a competitive landscape.
Refresher: How to determine the financial health of a company.
Download Data Set
To download the 30 companies data set in this analysis, enter your email address below to sign-up for the mailing list and the data set will be sent to your email directly. In some cases, it takes a few hours or a day to receive the email with the data set.