Contrarian Opportunities in Education REITs and Crypto-Linked Equities: Assessing Valuation Dislocations and Long-Term Potential

In the ever-shifting landscape of equity investing, valuation dislocations often present opportunities for contrarian strategies. Nowhere is this more evident than in the contrasting fates of Laureate Education (LAUR) and MicroStrategy (MSTR). While both companies operate in sectors undergoing fundamental transformation—education and technology—market reactions to their fundamentals have diverged sharply. For investors willing to look beyond short-term volatility, these dislocations hint at asymmetric risks and rewards.

Laureate Education: A Mispriced Engine of Growth

Laureate Education, a global education REIT focused on for-profit colleges and universities, has quietly posted robust fundamentals. For the second quarter of 2025, the company reported $524.2 million in revenue, a 5% year-over-year increase on a reported basis, and 10% growth on an organic constant currency basis. Adjusted EBITDA rose to $214.5 million, up 15% year-over-year. Yet its stock has dipped 1.23% post-earnings, trading at a trailing P/E ratio of 11.85—a stark discount to its sector's average of 28.46.

The dislocation stems from market skepticism about the education REIT sector, which has been battered by regulatory scrutiny and shifting student preferences. However, Laureate's balance sheet tells a different story. With $135.3 million in cash, $116.1 million in gross debt, and a Piotroski score of 9, the company is financially sound. Its updated 2025 guidance—$1.615–1.630 billion in revenue and $489–496 million in adjusted EBITDA—suggests earnings power that the market is underappreciating.

The company's strategic focus on digital learning and new campus expansions also positions it to capitalize on the growing demand for accessible education. For instance, its plans to open two new campuses in September 2025 and its 7% growth in new enrollments for the first half of 2025 highlight its ability to scale profitably. At a P/E of 11.85, Laureate trades at a 40% discount to its 10-year average of 18. This mispricing, in our view, creates a compelling entry point for investors who recognize the long-term value of its recurring revenue model and disciplined capital allocation.

MicroStrategy: A Bitcoin Play Disguised as a Software Company

In stark contrast, MicroStrategy—a once-pure-play enterprise software firm—has become a proxy for Bitcoin exposure. Over the past three years, the company has spent $21.97 billion to accumulate 478,740 BTC, transforming its balance sheet into a crypto treasury. Yet its P/B ratio of 248.105 and a P/E ratio at a loss (TTM EPS of -$21.81) suggest a valuation disconnected from traditional software fundamentals.

The Genius Act, a U.S. law passed in 2025, has further complicated the narrative. By classifying stablecoins as payment methods and restricting interest-bearing features, the legislation has reinforced the dollar's dominance in digital payments. While this could benefit firms like MicroStrategy that operate in the crypto infrastructure space, the company's $463 million in 2024 revenue pales against its $110.972 billion market cap. At a P/S ratio of 240, MicroStrategy is priced as if it were a high-growth tech unicorn, not a company with a history of losses.

The risks are twofold. First, Bitcoin's volatility makes MicroStrategy's stock a speculative bet on crypto cycles. Second, the company's aggressive capital-raising—$21.23 billion raised in three months through equity and debt—has inflated its share count by 156% since 2020, diluting existing shareholders. While CEO Michael Saylor touts the “Bitcoin Yield KPI” as a metric of efficiency, the strategy relies on the assumption that Bitcoin will appreciate indefinitely—a dangerous bet for a company already leveraged to crypto prices.

Market Dislocations and Contrarian Logic

The key insight lies in the divergent narratives driving these two stocks. Laureate Education is undervalued because the market fears regulatory tailwinds and secular declines in for-profit education. Yet its 10% organic growth, $19.2 million in net cash, and 6% enrollment growth suggest a resilient business model. For contrarians, the risk is low: Laureate's P/E of 11.85 is near its 5-year low, and its Piotroski score of 9 indicates strong financial health.

MicroStrategy, on the other hand, is overvalued because the market is conflating its software business with its Bitcoin holdings. The company's $248 P/B ratio and $110.972 billion market cap reflect a belief that Bitcoin will outperform traditional assets—a view that may hold in the long term but is inherently speculative. For investors, the question is whether they want to bet on crypto's future or stick with a company that generates cash and reinvests it prudently.

Investment Thesis

1. Laureate Education (LAUR): Buy the dip. At a P/E of 11.85 and a Piotroski score of 9, the stock is undervalued relative to its fundamentals. Its updated guidance and campus expansion plans suggest 6–7% organic growth, making it a compelling long-term hold.
2. MicroStrategy (MSTR): Avoid overexposure. While Bitcoin's potential is undeniable, MicroStrategy's valuation is detached from its software business and its aggressive capital structure introduces unnecessary risk. For crypto-optimists, a small position could make sense, but it's a high-conviction trade.

In conclusion, valuation dislocations in education REITs and crypto-linked equities offer contrasting lessons. Laureate Education represents a classic value play: a fundamentally strong company trading at a discount. MicroStrategy, meanwhile, is a speculative bet wrapped in a software company. For contrarians, the former's margin of safety and the latter's volatility present asymmetric opportunities—provided investors are clear-eyed about the risks.