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McGraw Hill, Inc.
(NYSE:MH)
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Rating:68Neutral
Price Target:
$14.50
▲(9.43% Upside)
Action:Reiterated
Date:08/17/26
The score is driven primarily by improving financial performance (return to profitability and strong free cash flow) but held back by still-elevated leverage. Technicals add support due to an uptrend with positive MACD, though momentum is near overbought levels. Valuation is a modest drag given a ~27.9 P/E without a provided dividend yield, while the latest earnings call was a positive contributor due to reaffirmed guidance, mix/margin strength, and continued debt reduction.
Positive Factors
Recurring and Digital Revenue Mix
The large recurring and digital mix should improve revenue visibility, customer retention, and delivery economics over time. It also reduces dependence on one-time print sales and supports scalable subscription-based monetization.
Negative Factors
Elevated Financial Leverage
Leverage remains high relative to the rebuilt equity base, limiting flexibility during weaker adoption or enrollment periods. Debt obligations increase sensitivity to execution, cash-flow volatility, and any slowdown in education procurement.
Read all positive and negative factors
Positive Factors
Negative Factors
Recurring and Digital Revenue Mix
The large recurring and digital mix should improve revenue visibility, customer retention, and delivery economics over time. It also reduces dependence on one-time print sales and supports scalable subscription-based monetization.
Read all positive factors
McGraw Hill, Inc. (MH) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.49B
Dividend YieldN/A
Average Volume (3M)991.59K
Price to Earnings (P/E)28.2
Beta (1Y)0.18
Revenue Growth0.14%
EPS GrowthN/A
CountryUS
Employees4,400
SectorGeneral
Sector StrengthN/A
IndustryEducation & Training Services
Share Statistics
EPS (TTM)0.47
Shares Outstanding191,308,800
10 Day Avg. Volume617,641
30 Day Avg. Volume991,592
Financial Highlights & Ratios
PEG Ratio-0.51
Price to Book (P/B)3.46
Price to Sales (P/S)1.20
P/FCF Ratio10.20
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$17.20Price Target Upside29.81% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering11
EPS Forecast (FY)1.97
Revenue Forecast (FY)$2.15B
McGraw Hill, Inc. Business Overview & Revenue Model
Company Description
McGraw Hill, Inc., known as McGraw Hill, delivers educational resources to students and professionals across primary (K-12), higher education, and specialized professional sectors, both domestically in the United States and internationally. The co...
How the Company Makes Money
McGraw Hill primarily makes money by selling education products and services to institutions and learners, with revenue historically generated through a mix of print and digital channels. Key revenue streams include: (1) digital learning platforms...
McGraw Hill, Inc. Earnings Call Summary
Earnings Call Date:Aug 13, 2026
(Q1-2027)
| % Change Since: |
Next Earnings Date:Nov 18, 2026
Earnings Call Sentiment Positive
The call presented a predominately positive operational and financial picture: revenue and profitability beat expectations, recurring and digital revenue mix strengthened, higher education market share and Inclusive Access/Evergreen momentum were highlighted, AI and medical initiatives showed early traction, and substantial gross debt reduction improved the balance sheet. Most negatives were timing, seasonality, or one-time items (shipment delays in the Middle East, non‑recurring IP sale, and continued dependence on fall enrollment and K‑12 award timing). Given the breadth of tangible wins, margin expansion, and balance-sheet improvement — with the remaining risks largely timing or visibility related — the overall tone is constructive.Positive Updates
Revenue and Profitability Outperformance
Total revenue $550 million, up 2.6% year-over-year; adjusted EBITDA $207 million with a 37.7% margin (increase of 192 basis points YoY); net income $58 million. Recurring revenue $426 million, up ~9.8% YoY and representing 77% of total revenue.
Negative Updates
Modest Overall Revenue Growth
Total revenue growth was modest at 2.6% YoY and K-12 growth was only 1.3% YoY, indicating limited top-line acceleration despite segment-level wins.
Read all updates
Q1-2027 Updates
Positive
Negative
Revenue and Profitability Outperformance
Total revenue $550 million, up 2.6% year-over-year; adjusted EBITDA $207 million with a 37.7% margin (increase of 192 basis points YoY); net income $58 million. Recurring revenue $426 million, up ~9.8% YoY and representing 77% of total revenue.
Read all positive updates
Company Guidance
McGraw Hill reaffirmed its fiscal 2027 guidance across all metrics ahead of the primary back‑to‑school selling season, while embedding an assumption of 1% enrollment growth and cautioning that adjusted EBITDA can shift between Q1 and Q2 due to academic seasonality (they therefore focus on first‑half results); Q1 results that support the outlook included $550 million of revenue (+2.6% YoY) with recurring revenue $426 million (+9.8%, 77% of total), digital revenue ~64% of total (+~9% YoY), adjusted EBITDA of $207 million (37.7% margin, +192 bps YoY), remaining performance obligation of $1.5 billion, cash of $194 million and total liquidity of $644 million, plus FY2026 gross debt reduction of $646 million (cutting annualized cash interest by ~$45 million), a net‑leverage target of 2.0–2.5x, and a $50 million share‑repurchase authorization while continuing to pursue organic reinvestment and select tuck‑in M&A.McGraw Hill, Inc. Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
46
Neutral
Cash Flow
67
Positive
| Breakdown | TTM | Mar 2026 | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.12B | 2.10B | 2.10B | 1.96B | 1.95B | 1.79B |
| Gross Profit | 1.73B | 1.70B | 1.68B | 1.54B | 1.48B | 1.37B |
| EBITDA | 573.36M | 677.70M | 669.16M | 571.18M | 495.71M | 335.69M |
| Net Income | 92.68M | 35.32M | -85.84M | -193.02M | -404.10M | -674.25M |
Balance Sheet | ||||||
| Total Assets | 5.38B | 5.49B | 5.76B | 5.81B | 6.07B | 6.59B |
| Cash, Cash Equivalents and Short-Term Investments | 193.64M | 253.52M | 389.83M | 203.62M | 181.47M | 296.37M |
| Total Debt | 2.65B | 2.65B | 3.26B | 3.53B | 3.59B | 3.70B |
| Total Liabilities | 4.59B | 4.76B | 5.48B | 5.44B | 5.51B | 5.64B |
| Stockholders Equity | 788.39M | 726.22M | 280.24M | 368.75M | 558.13M | 948.95M |
Cash Flow | ||||||
| Free Cash Flow | 358.71M | 246.31M | 575.22M | 79.55M | 116.06M | 175.04M |
| Operating Cash Flow | 428.43M | 331.17M | 646.28M | 236.16M | 256.62M | 205.69M |
| Investing Cash Flow | -223.08M | -203.86M | -167.06M | -136.11M | -162.32M | -5.32B |
| Financing Cash Flow | -260.63M | -264.87M | -294.68M | -77.24M | -204.57M | 5.06B |
McGraw Hill, Inc. Risk Analysis
McGraw Hill, Inc. disclosed 60 risk factors in its most recent earnings report. McGraw Hill, Inc. reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
McGraw Hill, Inc. Peers Comparison
UnderperformOutperform
Sector (55)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $5.63B | 2.37 | 24.59% | ― | 32.55% | 846.04% | |
77 Outperform | $9.13B | 19.33 | 11.96% | 2.44% | 15.64% | 32.37% | |
70 Outperform | $3.88B | 18.05 | 31.24% | ― | 6.97% | 0.18% | |
68 Neutral | $2.49B | 28.19 | 12.02% | ― | 0.14% | ― | |
59 Neutral | $1.60B | -8.97 | -17.74% | ― | 22.69% | -112.56% | |
55 Neutral | $6.65B | 3.83 | -15.92% | 6.20% | 10.91% | 7.18% |
* General Sector Average
MH
McGraw Hill, Inc.
13.25
-1.27
-8.75%
LOPE
Grand Canyon Education
150.19
-51.38
-25.49%
EDU
New Oriental Education Tech
57.94
11.02
23.49%
TAL
TAL Education Group
11.72
1.10
10.36%
COUR
Coursera
6.39
-5.11
-44.43%
McGraw Hill, Inc. Corporate Events
Business Operations and StrategyFinancial DisclosuresShareholder Meetings
McGraw Hill Reports Strong Fiscal Q1 2027 Results
Positive
Aug 13, 2026
On August 11, 2026, McGraw Hill held its virtual annual meeting of stockholders, who elected four directors to serve until the 2029 annual meeting, approved on an advisory basis the compensation of named executive officers, set annual advisory vot...
Business Operations and StrategyStock BuybackFinancial Disclosures
McGraw Hill Reports Fiscal 2026 Results and Outlook
Positive
Jun 11, 2026
On June 11, 2026, McGraw Hill reported fiscal year 2026 results showing total revenue of $2.10 billion, essentially flat year-over-year, but with re-occurring revenue up 5.8% to $1.54 billion and digital revenue up 5.5% to $1.43 billion, driving G...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.