One-glance verdict
Undervalued
$57.21 our estimate vs market $38.76
Wall Street consensus: $38.50 (-32.7% lower than our fair-value estimate)
32% below our estimate, below the bear case
Fundamentals snapshot
Scholastic Corporation
SCHL · NMS · Communication Services · Publishing
Current price
$38.76
52-week range
$26.38 - $48.07
Market cap
$713.55M
Balance sheet
Stretched
1.85x Concerning
Net debt $402.90M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
1 Risk
3 rewards · 1 risks
- Reward Returns 7.4% on equity, ahead of 20% of its peers.
- Reward Free cash flow was positive in 4/10 years.
- Reward Dividend yield is 2.6% with 19-year payout history.
- Risk Operating margin compressed from 6.2% to -39.6% over 3 years.
What this company does
Scholastic Corporation
Scholastic Corporation makes and sells books and educational materials for kids, with its main money coming from selling these through school book fairs, book clubs, and directly to schools. This matters because their popular books, like Harry Potter and Dog Man, and their educational offerings keep schools and parents buying their products, which helps Scholastic's revenue (the total money earned from sales).
How the company got here
Scholastic Corporation has a long history, starting in 1920 as a small magazine publisher. It grew by focusing on children's literature and educational materials, becoming a household name through its iconic book clubs and fairs in schools. Key turning points included publishing blockbuster series like "Harry Potter" and "The Hunger Games," which significantly boosted its sales and global reach. The company has adapted over the years, expanding into digital products and educational solutions to stay relevant in a changing market.
What it actually does
Scholastic Corporation is primarily known for publishing and distributing books for children. Think of the books you see in school book fairs or the magazines that arrive in classrooms – that's Scholastic. They create and sell a wide variety of reading materials, from popular fiction series to educational resources, reaching kids through schools, libraries, and online. They also venture into creating content for film and television based on their popular book properties.
Children's Book Publishing and Distribution
This is Scholastic's biggest business, where they publish and sell children's books in print, digital, and audio formats. They reach kids directly through school reading events, book clubs, and book fairs, making reading accessible and exciting for students. This segment also includes hugely popular original series like "Dog Man" and "The Hunger Games," as well as licensed properties such as "Peppa Pig." It represents a substantial portion of the company's overall revenue.
Education Solutions
This part of Scholastic focuses on providing educational materials to schools. They publish classroom magazines, like "Scholastic News" and "Storyworks," that help teach various subjects. They also offer supplemental learning programs and resources, both in print and digital formats, designed to support teachers and enhance student learning. This segment is crucial for Scholastic's role in the education system.
International
Scholastic's international segment handles the publishing and distribution of books and educational materials in various languages, including English, Hindi, and French, across different countries. They operate similar school-based marketing channels and supply children's books and teacher resources to markets outside their primary regions. This segment helps Scholastic reach a global audience with its diverse range of products.
Entertainment
This smaller segment is focused on bringing Scholastic's beloved characters and stories to life beyond the page. They are involved in the development, production, and distribution of children's and family film and television content. This allows them to leverage their existing intellectual property and create new revenue streams by adapting popular books into other media formats.
What management is betting on now
Scholastic's management is focused on strengthening its core businesses while exploring new avenues for growth. A key priority is continuing to publish engaging content that resonates with young readers and educators, ensuring their book clubs and fairs remain popular. They are also likely investing in digital offerings and educational technology to adapt to evolving learning environments. Expanding their international presence and leveraging their entertainment properties are also strategic goals to diversify revenue and reach a wider audience.
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.
Revenue
$216.80M
Net income
$-71.20M
Diluted EPS
-3.77
Operating cash flow
$-94.60M
Free cash flow
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Sources
Revenue
$476.10M
Net income
$9.40M
Diluted EPS
0.45
Operating cash flow
$90.00M
Free cash flow
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Sources
Revenue
$329.10M
Net income
$62.50M
Diluted EPS
2.55
Operating cash flow
$-30.50M
Free cash flow
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Revenue
$551.10M
Net income
$55.90M
Diluted EPS
2.17
Operating cash flow
$73.20M
Free cash flow
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Sources
Revenue
$225.60M
Net income
$-71.10M
Diluted EPS
-2.83
Operating cash flow
$-81.80M
Free cash flow
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Sources
Revenue
$508.30M
Net income
$15.40M
Diluted EPS
0.56
Operating cash flow
$106.90M
Free cash flow
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Revenue
$335.40M
Net income
$-3.60M
Diluted EPS
-0.13
Operating cash flow
$-12.00M
Free cash flow
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Sources
Revenue
$544.60M
Net income
$48.80M
Diluted EPS
1.71
Operating cash flow
$71.20M
Free cash flow
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Is it cheap or expensive?
Fair value $57.21 vs current price $38.76
Wall Street consensus is the average analyst price target: $38.50 (-32.7% lower than our fair-value estimate).
Our most-likely fair value is $57.21 a share — about 47.6% above today's price of $38.76, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Stretched
Net debt $402.9M. Interest coverage 1.9x.
Net debt
$402.90M
Interest coverage
1.85x
Scholastic Corporation's profit covers its interest bill about 1.9 times over. and 1 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Stretched
Worse cushion
Baseline
Better cushion
SCHL
BASELINE
Scholastic Corporation
Total debt $509.70M Interest coverage 1.85x This is the baseline the peer rows are being compared against.
Total debt $6.50M Interest coverage -4.86x -100% vs SCHL This peer has almost no interest-payment cushion compared with SCHL.
Total debt $1.46B Interest coverage 2.08x +12% vs SCHL Has roughly the same debt cushion as SCHL.
Total debt $619.04M Interest coverage 38.27x +1,968% vs SCHL Carries about 20.7x more debt cushion than SCHL.
Total debt $153.47M Interest coverage 12.73x +588% vs SCHL Carries about 6.9x more debt cushion than SCHL.
What you should know
The case for and against SCHL
3 Rewards
1 Risk
Rewards
-
Returns 7.4% on equity, ahead of 20% of its peers.
-
Free cash flow was positive in 4/10 years.
-
Dividend yield is 2.6% with 19-year payout history.
Risks
-
Operating margin compressed from 6.2% to -39.6% over 3 years.
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)
27.30x
Forward P/E
17.94x
P/B
1.09x
P/S
0.45x
EV/EBITDA
13.53x
PEG ratio
2.09x
Profitability
How much profit each dollar creates
Gross margin
56.5%
Operating margin
-39.6%
Net margin
3.6%
ROE
7.4%
ROA
1.6%
Health
Liquidity and balance-sheet strength
Debt / equity
0.78x
Current ratio
1.25x
Quick ratio
0.62x
Total debt
$509.70M
Total cash
$106.80M
Growth
How the business has been compounding
Revenue TTM
$1.57B
Revenue 5Y CAGR
-0.9%
EPS TTM
1.42
EPS 5Y CAGR
-2.0%
Cash flow
How much cash the business throws off
Operating CF TTM
$38.10M
Free CF TTM
$2.50M
FCF margin
0.2%
Dividend
Shareholder payout
Yield
2.6%
Payout ratio
59.9%
Last ex-div date
2026-10-30