The IDP Education Ltd (ASX: IEL) share price was on form on Thursday.
The language testing and student placement company's shares rose 2% to $29.00.
This leaves the IDP Education share price trading within sight of its record high of $30.34.
Can the IDP Education share price keep rising?
The good news is that one leading broker still see a lot of value in the IDP Education share price even though it is close to a record high.
According to a note out of Goldman Sachs this morning, the broker has retained its buy rating but slightly trimmed its price target on the company's shares to $34.00.
Based on the current IDP Education share price, this implies potential upside of 17% over the next 12 months.
Why is Goldman bullish on IDP Education?
Goldman Sachs was pleased with IDP Education's performance in FY 2021. Particularly given the headwinds it was facing because of COVID-19.
Pleasingly, with these headwinds easing, the broker is confident that the coming years will be even stronger. The note reveals that its analysts are expecting its Northern Hemisphere operations to underpin a strong result in FY 2022. After which, it expects its ANZ operations to support further strong growth in FY 2023. It is partly for this reason why it feels the IDP Education share price is such good value now.
Goldman said: "IEL's business has proven resilient during the pandemic so far and is poised to deliver strong growth in FY22 driven by Northern Hemisphere demand. Qualified SP [student placement] leads in the Northern Hemisphere in 2H21 were above pre-COVID levels. IELTS volumes have shown a similar recovery."
"We believe this sets the business up for a very strong FY22 in its Northern Hemisphere IELTS testing markets and multi-destination SP. The pending reopening of ANZ to international students is likely commence in late FY22, driving FY23 growth."
Post-FY 2023, the broker believes "compelling long-term structural growth in international student volumes and IELTS testing demand should drive earnings in FY24 and beyond."
Overall, Goldman is forecasting a 69% compound annual growth rate (CAGR) for its earnings over the next three years. It also sees opportunities for this growth rate to increase through acquisitions.
Its analysts explained: "Our 3-yr EPS CAGR of 69% justifies our Buy rating in our view. The growth profile is likely to be enhanced by potential future acquisitions, which are not included in our earnings forecasts. These may include further consolidation of the IELTS market."
