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Cengage Learning Holdings II (CNGO)
:CNGO
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Cengage Learning Holdings II
(OTC:CNGO)
58Neutral
Cengage Learning Holdings II (CNGO) vs. S&P 500 (SPY)
Market Cap
$1.29B
Dividend YieldN/A
Average Volume (3M)0.00
Price to Earnings (P/E)―
Beta (1Y)0.05
Revenue Growth0.03%
EPS Growth-6.51%
CountryUS
Employees4,400
SectorConsumer Cyclical
Sector Strength75
IndustryPublishing
Share Statistics
EPS (TTM)0.15
Shares Outstanding62,400,000
10 Day Avg. Volume0
30 Day Avg. Volume0
Financial Highlights & Ratios
PEG Ratio-0.44
Price to Book (P/B)34.82
Price to Sales (P/S)0.00
P/FCF Ratio9.71
Enterprise Value/Market Cap2.06
Enterprise Value/Revenue0.45
Enterprise Value/Gross Profit3.66
Enterprise Value/Ebitda2.22
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
Cengage Learning Holdings II Business Overview & Revenue Model
Company DescriptionCengage Learning Holdings II, known as Cengage, is a prominent education and technology company that operates primarily in the United States. The company focuses on providing high-quality educational content, digital learning solutions, and personalized learning experiences for students and educators. Cengage's core products and services include textbooks, online learning platforms, and digital course solutions, serving a wide range of educational institutions from K-12 to higher education.
How the Company Makes MoneyCengage makes money primarily through the sale of educational content and digital learning solutions. Its revenue model is based on product sales, subscriptions, and licensing agreements. Cengage generates income from selling textbooks and digital course materials directly to students and educational institutions. Additionally, the company offers subscription services for access to its online learning platforms, which provide interactive and personalized learning experiences. Partnerships with educational institutions and other stakeholders also play a significant role in driving revenue, as these collaborations often result in customized content and solutions tailored to specific educational needs. Cengage's focus on digital transformation and innovation in educational technology also contributes to its earnings, as it increasingly shifts towards digital and subscription-based models.
Cengage Learning Holdings II Financial Statement Overview
Summary
Cengage Learning Holdings II shows mixed financial health. The income statement reflects strong gross margins and moderate revenue growth, but persistent net losses indicate profitability challenges. The balance sheet reveals high leverage and financial risk due to a negative equity base. Cash flow is robust, with efficient cash management offsetting net losses. Overall, financial stability is a concern with high debt levels, though cash flow performance is a strong point.Income Statement
Cengage Learning Holdings II shows a mixed performance in its income statement. The TTM data indicates a gross profit margin of 49.35%, which is relatively strong. However, the net profit margin is negative due to continuous net losses, indicating challenges in achieving profitability. Revenue growth has been moderate, reflecting some growth potential despite industry challenges. The EBIT margin stands at 12.79%, suggesting moderate operational efficiency, while the EBITDA margin of 19.80% highlights good cost management before depreciation and amortization.65
Positive
Balance Sheet
The company's balance sheet reveals a high debt-to-equity ratio due to low stockholders' equity, signaling financial risk. The return on equity is negative, reflecting net losses and low equity base. The equity ratio is a mere 1.49%, indicating high leverage and potential solvency concerns. Overall, the financial stability is weak, and the company is heavily reliant on debt financing.50
Neutral
Cash Flow
Cash flow analysis shows strength in operating cash flow with an increase to $187.6 million in TTM, leading to a robust operating cash flow to net income ratio, despite net losses. Free cash flow grew significantly, demonstrating improved cash generation capabilities. The free cash flow to net income ratio is favorable, indicating efficient cash management in offsetting net losses.70
Positive
| Breakdown | |||||
| TTM | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 | Mar 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 1.48B | 1.50B | 1.42B | 1.37B | 1.24B | 1.33B | Gross Profit |
| 730.20M | 805.70M | 604.20M | 586.70M | 492.60M | 503.60M | EBIT |
| 189.20M | 148.70M | 165.20M | 166.40M | 109.10M | 126.10M | EBITDA |
| 293.00M | 331.80M | 385.70M | 356.10M | 287.60M | -479.60M | Net Income Common Stockholders |
| -71.90M | -80.90M | -40.20M | -44.60M | -110.10M | -908.90M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 264.90M | 264.90M | 269.30M | 348.00M | 457.50M | 366.00M | Total Assets |
| 2.60B | 2.60B | 2.65B | 2.73B | 2.74B | 2.83B | Total Debt |
| 1.68B | 1.68B | 2.20B | 2.30B | 2.30B | 2.37B | Net Debt |
| 1.42B | 1.42B | 1.93B | 1.95B | 1.85B | 2.01B | Total Liabilities |
| 2.49B | 2.49B | 2.96B | 2.99B | 2.96B | 2.96B | Stockholders Equity |
| 114.70M | 114.70M | -308.80M | -258.20M | -212.30M | -133.80M |
| Cash Flow | Free Cash Flow | ||||
| 133.30M | 48.20M | 26.40M | 93.30M | 161.70M | 4.50M | Operating Cash Flow |
| 187.60M | 166.50M | 155.80M | 205.90M | 273.30M | 154.40M | Investing Cash Flow |
| -119.10M | -120.80M | -132.20M | -296.30M | -113.50M | -150.40M | Financing Cash Flow |
| -38.80M | -50.10M | -100.80M | -18.70M | -70.30M | 27.20M |
Cengage Learning Holdings II Technical Analysis
Positive
20.75
Price Trends
20.75
Neutral
20.38
Positive
19.32
Positive
Market Momentum
<0.01
Positive
100.00
Negative
100.00
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CNGO, the sentiment is Positive. The current price of 20.75 is equal to the 20-day moving average (MA) of 20.75, equal to the 50-day MA of 20.75, and above the 200-day MA of 19.32, indicating a neutral trend. The MACD of <0.01 indicates Positive momentum. The RSI at 100.00 is Negative, neither overbought nor oversold. The STOCH value of 100.00 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CNGO.
Cengage Learning Holdings II Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $9.12B | 30.51 | 16.68% | 1.02% | 6.85% | 21.26% | |
76 Outperform | $10.41B | 19.67 | 10.99% | 1.96% | -0.59% | 24.06% | |
66 Neutral | $478.25M | 30.24 | 1.92% | 4.43% | -3.10% | -58.47% | |
61 Neutral | $6.97B | 11.38 | 2.88% | 3.90% | 2.64% | -22.07% | |
58 Neutral | $1.29B | ― | -80.02% | ― | 0.03% | -6.51% | |
58 Neutral | $2.36B | 59.18 | 5.77% | 3.21% | -11.77% | ― | |
46 Neutral | $10.90M | ― | -12.44% | ― | -35.97% | -2121.45% |
* Consumer Cyclical Sector Average
Performance Comparison
CNGO
Cengage Learning Holdings II
20.75
7.50
56.60%
EDUC
Educational Development
1.34
-0.72
-34.95%
WLY
John Wiley Sons Cl A
43.76
6.39
17.10%
NYT
New York Times
55.26
6.77
13.96%
PSO
Pearson
16.35
4.44
37.28%
SCHL
Scholastic
17.94
-17.54
-49.44%
Cengage Learning Holdings II Earnings Call Summary
Earnings Call Date:Feb 06, 2025
(Q3-2025)
| % Change Since: 6.41%|
Next Earnings Date:Jun 05, 2025
Earnings Call Sentiment Positive
The earnings call highlighted Cengage Group's consistent revenue and EBITDA growth, successful cost savings initiatives, and strategic acquisitions. However, challenges in certain segments and regions, such as the decline in Cengage Select and international education, present areas of concern.Q3-2025 Updates
Positive Updates
Consistent Revenue and EBITDA Growth
Cengage Group is on track to deliver its fourth consecutive year of revenue and EBITDA growth, with expected revenue growth of 3% and EBITDA growth of 15% for fiscal year 2025.
Successful Cost Savings and Efficiency Program
The cost savings and efficiency program has been substantially executed, resulting in over $60 million of savings in fiscal 2025 and an expected total of $100 million in savings through fiscal 2026.
Strategic Acquisitions and Partnerships
Cengage Group announced the acquisition of Visible Body and expanded its partnership with Big Ideas Learning, enhancing its science offerings and supporting upcoming math adoptions.
Strong Performance in Cengage Work
Cengage Work reported year-to-date revenue growth of 15%, with a significant EBITDA contribution expected to reach around $20 million for the full year.
US Higher Education Growth
US Higher Education revenue grew by 4% year-to-date, driven by digital and institutional growth, improved enrollment, and lower returns in print.
Negative Updates
Decline in Cengage Select Revenue
Cengage Select reported a 6% decline in year-to-date revenues, largely due to a one-time impact from rebasing a large Ministry of Education contract in the English Language Teaching segment.
Challenges in International Higher Education
International Higher Education experienced a 7% decline in year-to-date revenue, driven by higher print dependency and enrollment pressures, particularly in Latin America.
Weakness in US Public and School Library Markets
Research segment faced demand weakness due to funding pressures in the US public and school library markets, contributing to a 6% decline in year-to-date revenues.
Company Guidance
During the call, Cengage Group provided guidance for the fiscal year 2025, forecasting revenues between $1.56 billion and $1.57 billion, representing an underlying growth of 3% when adjusted for a one-time contract impact in their English Language Teaching segment. The company expects adjusted cash EBITDA to range from $530 million to $535 million, marking a 15% growth and achieving margins around 34%, which is approximately 400 basis points higher than the previous fiscal year. Additionally, Cengage anticipates $390 million to $400 million in operating cash flow, with a net leverage ratio of 2.5 times or lower by the fiscal year's end.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.