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McGraw Hill, Inc.
(NYSE:MH)
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Rating:52Neutral
Price Target:
$9.00
▼(-36.17% Downside)
Action:Reiterated
Date:06/16/26
The score is held back primarily by high leverage and mixed recent operating trends (including the reported revenue contraction), with bearish technicals and a high P/E further limiting attractiveness. Offsetting these, the latest earnings call was broadly positive, highlighting improving profitability, strong cash generation with higher FY2027 free-cash-flow guidance, and continued deleveraging efforts.
Positive Factors
Recurring revenue strength
A high and growing recurring revenue base (>73% of sales, +6% YoY) materially improves revenue predictability and cash flow visibility over 2–6 months. This supports steadier institutional renewals, reduces exposure to one-off adoptions and underpins sustainable investment in product development and customer success.
Negative Factors
High leverage
Elevated debt levels leave the company vulnerable to earnings volatility and interest costs, constraining strategic flexibility. Even with recent paydowns, leverage remains material versus peers, increasing refinancing risk and making execution on growth or AI investments more sensitive to cash-flow variability over the medium term.
Read all positive and negative factors
Positive Factors
Negative Factors
Recurring revenue strength
A high and growing recurring revenue base (>73% of sales, +6% YoY) materially improves revenue predictability and cash flow visibility over 2–6 months. This supports steadier institutional renewals, reduces exposure to one-off adoptions and underpins sustainable investment in product development and customer success.
Read all positive factors
McGraw Hill, Inc. (MH) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.81B
Dividend YieldN/A
Average Volume (3M)586.25K
Price to Earnings (P/E)54.8
Beta (1Y)-0.05
Revenue Growth0.07%
EPS GrowthN/A
CountryUS
Employees4,200
SectorConsumer Defensive
Sector Strength42
IndustryEducation & Training Services
Share Statistics
EPS (TTM)0.17
Shares Outstanding191,276,170
10 Day Avg. Volume960,637
30 Day Avg. Volume586,250
Financial Highlights & Ratios
PEG Ratio-0.51
Price to Book (P/B)3.46
Price to Sales (P/S)1.20
P/FCF Ratio19.74
Enterprise Value/Market Cap2.38
Enterprise Value/Revenue2.05
Enterprise Value/Gross Profit2.54
Enterprise Value/Ebitda6.71
Forecast
1Y Price Target
$17.70Price Target Upside25.53% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering11
EPS Forecast (FY)1.95
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 educational content and learning solutions to institutions (such as schools, school districts, colleges, and universities), educators, students, and professionals. Key revenue streams include: (1) Digit...
McGraw Hill, Inc. Earnings Call Summary
Earnings Call Date:Jun 11, 2026
(Q4-2026)
| % Change Since: |
Next Earnings Date:Aug 13, 2026
Earnings Call Sentiment Positive
The call presented a predominantly positive operational and financial picture: key strengths include higher-education share gains (approaching 31%), recurring revenue growth (~6% to $1.5B), margin expansion (≈+80 bps), meaningful AI product traction (8 tools, >7.5M users), strong learning outcomes validated by independent research, and significant debt reduction ($646M). Headwinds are concentrated in K–12 (FY2026 K–12 revenue down 9%), slower-than-expected California math adoption (timing shift of ~$100M), international macro pressures (FY2026 international revenue -7% and a $39M impairment), and some one-time benefits in FY2026 that are not recurring. Management provided conservative but above-IPO-expectations guidance for recurring revenue and EBITDA, and is piloting agentic AI/knowledge models with commercial and pricing work still underway. Overall, strengths in higher education, AI-enabled product adoption, cash generation, and balance sheet improvement outweigh the K–12 and international timing challenges, which are framed as addressable and timing-related.Positive Updates
Full Year Revenue Above Guidance
Fiscal 2026 revenue of $2.1 billion came in above the high end of the guided range and was $2 million above prior year, demonstrating resilience versus expectations.
Negative Updates
K–12 Revenue Decline and Slower Adoption
Fiscal 2026 K–12 revenue declined 9% year-over-year to $884 million, reflecting a smaller K–12 market opportunity and tough prior-year comps. Management expects FY2027 K–12 capture to be at the lower end of its historical 25%–30% range and noted slower-than-expected California math adoption, with roughly $100 million of opportunity shifting from FY2027 into FY2028.
Read all updates
Q4-2026 Updates
Positive
Negative
Full Year Revenue Above Guidance
Fiscal 2026 revenue of $2.1 billion came in above the high end of the guided range and was $2 million above prior year, demonstrating resilience versus expectations.
Read all positive updates
Company Guidance
McGraw Hill guided fiscal 2027 revenue of $2.115–$2.175 billion (consistent with its IPO dollar outlook), recurring revenue of $1.587–$1.627 billion, and adjusted EBITDA of $750–$790 million (implied margin ~35.9% at the midpoint, ~+50 bps YoY); it expects ~55% of full‑year revenue in H1 (weighted to Q2), unlevered free cash flow of ~ $400 million (up ~20% YoY), CapEx and product development ~10% of revenue, stock‑based compensation ~ $15 million, cash/GAAP taxes $20–$40 million, GAAP interest expense below $180 million, and a modest decline in depreciation & amortization (including $208 million of Platinum‑related intangible amortization); management reiterated a net‑leverage target of 2.0–2.5x and authorized a $50 million share repurchase plan.McGraw Hill, Inc. Financial Statement Overview
Summary
Income Statement
52
Neutral
Balance Sheet
34
Negative
Cash Flow
63
Positive
| Breakdown | Mar 2026 | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 2.10B | 2.10B | 1.96B | 1.95B | 1.79B |
| Gross Profit | 1.70B | 1.68B | 1.54B | 1.48B | 1.37B |
| EBITDA | 677.70M | 669.16M | 571.18M | 495.71M | 335.69M |
| Net Income | 35.32M | -85.84M | -193.02M | -404.10M | -674.25M |
Balance Sheet | |||||
| Total Assets | 5.49B | 5.76B | 5.81B | 6.07B | 6.59B |
| Cash, Cash Equivalents and Short-Term Investments | 253.52M | 389.83M | 203.62M | 181.47M | 296.37M |
| Total Debt | 2.65B | 3.26B | 3.53B | 3.59B | 3.70B |
| Total Liabilities | 4.76B | 5.48B | 5.44B | 5.51B | 5.64B |
| Stockholders Equity | 726.22M | 280.24M | 368.75M | 558.13M | 948.95M |
Cash Flow | |||||
| Free Cash Flow | 127.31M | 485.22M | 79.55M | 116.06M | 175.04M |
| Operating Cash Flow | 331.17M | 646.28M | 236.16M | 256.62M | 205.69M |
| Investing Cash Flow | -203.86M | -167.06M | -136.11M | -162.32M | -5.32B |
| Financing Cash Flow | -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 (62)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $5.30B | 3.34 | 14.92% | ― | 34.03% | 578.17% | |
73 Outperform | $7.57B | 17.43 | 10.79% | 1.03% | 12.38% | 11.05% | |
70 Outperform | $3.79B | 17.92 | 29.53% | ― | 7.43% | 0.49% | |
63 Neutral | $1.62B | -14.90 | -10.06% | ― | 9.79% | 8.61% | |
62 Neutral | $20.33B | 14.63 | -3.31% | 3.23% | 1.93% | -12.26% | |
52 Neutral | $1.81B | 54.78 | 5.48% | ― | 0.07% | ― |
* Consumer Defensive Sector Average
MH
McGraw Hill, Inc.
9.47
-7.34
-43.66%
LOPE
Grand Canyon Education
143.11
-46.18
-24.40%
EDU
New Oriental Education Tech
45.91
-6.51
-12.41%
TAL
TAL Education Group
9.57
-0.73
-7.09%
COUR
Coursera
5.64
-3.09
-35.40%
McGraw Hill, Inc. Corporate Events
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.