One-glance verdict
Overvalued
$3.86 our estimate vs market $14.10
Wall Street consensus: $17.92 (363.8% higher than our fair-value estimate)
265% above our estimate, beyond the bull case
Fundamentals snapshot
McGraw Hill, Inc.
MH · NYQ · Consumer Defensive · Education & Training Services
Current price
$14.10
52-week range
$8.95 - $18.00
Market cap
$2.70B
Balance sheet
Distressed
1.52x Concerning
Net debt $2.46B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
1 Risk
3 rewards · 1 risks
- Reward Revenue grew 0.7% last year.
- Reward Returns 17.3% on equity, ahead of 33% of its peers.
- Reward Free cash flow was positive in 4/10 years.
- Risk Insider ownership is only 0.4% (peer median: 3.8%).
What this company does
McGraw Hill, Inc.
McGraw Hill creates learning materials and digital tools for schools and professionals, mostly making money from selling these educational products. This matters because their consistent sales of educational content, which is a form of recurring revenue (money that comes in regularly, like a subscription), helps them plan their business and continue investing in new ways to teach.
What it actually does
McGraw Hill is essentially an education company that provides a wide range of learning materials and tools. Think of them as a modern-day publisher that has moved beyond just printing textbooks. They create and sell content, software, and services designed to help students learn and educators teach. This includes everything from traditional books to sophisticated digital platforms and adaptive learning technologies that tailor the educational experience to individual students. Their goal is to make learning more effective and accessible for people at all stages of their educational journey.
K-12
This segment is all about providing educational resources for students from kindergarten through 12th grade. McGraw Hill offers core curriculum materials, which are the main subjects taught in schools, as well as supplemental materials for extra practice and intervention programs for students who need additional support. They sell these learning solutions, which can be a mix of digital and print formats, directly to school districts across the United States. This part of the business is a significant contributor to McGraw Hill's overall revenue, making it a cornerstone of their operations.
Higher Education
This part of McGraw Hill focuses on providing learning solutions for college and university students, as well as the instructors and institutions themselves. They offer digital course experiences, often through a platform called 'Connect,' which provides adaptive learning tools and content. These solutions are used by students at both non-profit and for-profit colleges. McGraw Hill sells these higher education products through various channels, including online retailers, distribution partners, and directly to students via their own e-commerce website. This segment plays a crucial role in supporting students through their post-secondary education.
Global Professional
The Global Professional segment is dedicated to providing specialized learning resources for professionals and students in fields like medicine and engineering. This means they offer in-depth content, digital learning tools, and print materials that are essential for these technical and scientific disciplines. These resources are made available through various platforms and formats to ensure that professionals and students can access the information they need to advance their careers and studies. This segment caters to a specific, highly knowledgeable audience requiring specialized educational content.
International
This segment represents McGraw Hill's reach beyond the United States, offering its digital and print educational solutions in approximately 100 countries and in about 80 different languages. It's how the company makes its educational products available to a global audience. By adapting their content and delivery methods for different regions, McGraw Hill aims to serve learners worldwide. This international presence is key to their strategy for growth and for making their educational resources accessible on a global scale.
What management is betting on now
McGraw Hill's current strategy heavily emphasizes the integration of technology and digital learning solutions across all its segments. They are investing in artificial intelligence (AI) to create personalized learning experiences, such as AI-powered teaching assistants for K-12 programs. The company is also focusing on its 'Inclusive Access' model in higher education, which provides digital course materials directly to students, and its 'Evergreen' delivery model for continuous content updates. These strategies aim to improve learning outcomes, increase recurring revenue, and expand their market share in an increasingly digital educational landscape.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2025 Q2
$402.24M
FY2025 Q3
$261.42M
FY2025 Q4
$-69.63M
FY2026 Q1
$-112.94M
FY2026 Q2
$243.79M
FY2026 Q3
$285.40M
FY2026 Q4
$-169.95M
FY2027 Q1
$-23.33M
Revenue
$549.90M
Net income
$57.86M
Diluted EPS
0.30
Operating cash flow
$601.00K
Free cash flow
$-23.33M
Fetching…
Sources
Revenue
$463.72M
Net income
$-50.27M
Diluted EPS
-0.27
Operating cash flow
$-146.12M
Free cash flow
$-169.95M
Fetching…
Sources
Revenue
$434.16M
Net income
$-20.20M
Diluted EPS
-0.11
Operating cash flow
$308.97M
Free cash flow
$285.40M
Fetching…
Sources
Revenue
$669.19M
Net income
$105.28M
Diluted EPS
0.57
Operating cash flow
$264.98M
Free cash flow
$243.79M
Fetching…
Sources
Revenue
$535.71M
Net income
$502.00K
Diluted EPS
0.00
Operating cash flow
$-96.65M
Free cash flow
$-112.94M
Fetching…
Sources
Revenue
$473.26M
Net income
$-156.87M
Diluted EPS
-0.94
Operating cash flow
$-41.19M
Free cash flow
$-69.63M
Fetching…
Sources
Revenue
$416.49M
Net income
$-52.93M
Diluted EPS
-0.32
Operating cash flow
$275.01M
Free cash flow
$261.42M
Fetching…
Sources
Revenue
$688.59M
Net income
$133.40M
Diluted EPS
0.80
Operating cash flow
$415.36M
Free cash flow
$402.24M
Fetching…
Sources
Is it cheap or expensive?
Fair value $3.86 vs current price $14.10
Wall Street consensus is the average analyst price target: $17.92 (363.8% higher than our fair-value estimate).
Our most-likely fair value is $3.86 a share — about 72.6% below today's price of $14.10, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Distressed
Net debt $2.5B. Interest coverage 1.5x.
Net debt
$2.46B
Interest coverage
1.52x
McGraw Hill, Inc.'s profit covers its interest bill about 1.5 times over. which is weaker than most peers shown here.
Distressed
Worse cushion
Baseline
Better cushion
MH
BASELINE
McGraw Hill, Inc.
Total debt $2.65B Interest coverage 1.52x This is the baseline the peer rows are being compared against.
Total debt $1.38B Interest coverage 6.75x +343% vs MH Carries about 4.4x more debt cushion than MH.
Total debt $619.04M Interest coverage 38.27x +2,412% vs MH Carries about 25.1x more debt cushion than MH.
Total debt $113.77M Interest coverage 34.88x +2,189% vs MH Carries about 22.9x more debt cushion than MH.
What you should know
The case for and against MH
3 Rewards
1 Risk
Rewards
-
Revenue grew 0.7% last year.
-
Returns 17.3% on equity, ahead of 33% of its peers.
-
Free cash flow was positive in 4/10 years.
Risks
-
Insider ownership is only 0.4% (peer median: 3.8%).
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
29.38x
Forward P/E
6.79x
P/B
3.42x
P/S
1.27x
EV/EBITDA
8.87x
PEG ratio
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Profitability
How much profit each dollar creates
Gross margin
81.7%
Operating margin
21.5%
Net margin
4.4%
ROE
17.3%
ROA
3.9%
Health
Liquidity and balance-sheet strength
Debt / equity
3.37x
Current ratio
0.78x
Quick ratio
0.50x
Total debt
$2.65B
Total cash
$193.64M
Growth
How the business has been compounding
Revenue TTM
$2.12B
Revenue 5Y CAGR
7.3%
EPS TTM
0.48
EPS 5Y CAGR
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Cash flow
How much cash the business throws off
Operating CF TTM
$428.43M
Free CF TTM
$127.31M
FCF margin
6.0%
Dividend
Shareholder payout
Yield
0.0%
Payout ratio
0.0%
Last ex-div date
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