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Scholastic
(NASDAQ:SCHL)
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Rating:51Neutral
Price Target:
$40.00
▲(0.13% Upside)
Action:Reiterated
Date:08/28/26
The score is held back primarily by weaker cash-flow trends and a riskier balance-sheet trajectory (higher leverage), alongside bearish near-term technicals (below key moving averages and negative MACD). Offsetting these are a reasonable valuation with a ~2% dividend yield and a balanced FY27 outlook that points to modest growth and improving profitability, but with meaningful execution and education-funding risks.
Positive Factors
Book Fairs growth and school reach
Book Fairs provide a scalable, school-embedded distribution channel with broad reach and recurring participation. Growth in fairs, revenue per fair, and eWallet adoption supports durable access to students while reinforcing Scholastic’s position in school-based literacy.
Negative Factors
Higher leverage and reduced equity cushion
The sharp increase in leverage and shrinking equity cushion reduce financial flexibility and increase sensitivity to earnings volatility. Additional lease obligations from sale-leasebacks may further constrain the company if operating recovery or cash generation falls short.
Read all positive and negative factors
Positive Factors
Negative Factors
Book Fairs growth and school reach
Book Fairs provide a scalable, school-embedded distribution channel with broad reach and recurring participation. Growth in fairs, revenue per fair, and eWallet adoption supports durable access to students while reinforcing Scholastic’s position in school-based literacy.
Read all positive factors
Scholastic (SCHL) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$777.37M
Dividend Yield2%
Average Volume (3M)357.31K
Price to Earnings (P/E)16.3
Beta (1Y)0.71
Revenue Growth-2.68%
EPS GrowthN/A
CountryUS
Employees5,848
SectorCommunication Services
Sector Strength97
IndustryPublishing
Share Statistics
EPS (TTM)2.45
Shares Outstanding18,136,663
10 Day Avg. Volume346,828
30 Day Avg. Volume357,309
Financial Highlights & Ratios
PEG Ratio>-0.01
Price to Book (P/B)1.35
Price to Sales (P/S)0.64
P/FCF Ratio405.43
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
$42.00Price Target Upside5.13% Upside
Rating ConsensusHold
Number of Analyst Covering1
EPS Forecast (FY)2.61
Revenue Forecast (FY)$1.69B
Scholastic Business Overview & Revenue Model
Company Description
Scholastic Corporation, a company founded in 1920 and headquartered in New York, New York, specializes in the global creation and distribution of literary and educational materials for young people. Its operations are structured into three key bus...
How the Company Makes Money
Scholastic primarily makes money by selling children’s books and educational materials through multiple distribution channels, with revenue concentrated in its school-based and trade businesses. A major driver is its school channel, where it gener...
Scholastic Earnings Call Summary
Earnings Call Date:Jul 23, 2026
(Q4-2026)
| % Change Since: |
Next Earnings Date:Sep 17, 2026
Earnings Call Sentiment Neutral
The call presented a balanced picture: the company delivered meaningful gains in adjusted profitability, completed a major balance-sheet optimization that unlocked >$400M and materially increased shareholder returns, and showed product/channel momentum (Book Fairs, Entertainment and strong digital engagement). However, these positives were offset by a continued top-line decline (consolidated revenue down 3% YoY, Q4 down 6%), pronounced weakness in Education (FY revenue down 14%), a sharp Q4 trade publishing comparison, lower operating cash from core operations, and near-term headwinds from sale-leaseback lease expense and funding volatility in schools. Management provided modest FY27 guidance with recovery expected to build through the year, leaving the story balanced between operational improvement and lingering revenue/funding challenges.Positive Updates
Improved Profitability and Adjusted Results
Adjusted operating income rose to $47.1M for fiscal 2026, up 32% from $35.8M a year ago. Adjusted EBITDA was $151.5M, up 4% year-over-year and up 15% on a comparable basis reflecting the sale-leaseback impact. Fourth-quarter adjusted net income was $45.9M (vs. $22.9M prior year) and adjusted diluted EPS improved to $2.19 from $0.87, supported by tax strategies and share repurchases.
Negative Updates
Consolidated Revenue Decline
Consolidated revenue declined 3% for fiscal 2026 to ~$1.6B and fell 6% in the fourth quarter to $476.1M. Management cited a tough prior-year publishing comparison and ongoing volatility in education funding as primary drivers.
Read all updates
Q4-2026 Updates
Positive
Negative
Improved Profitability and Adjusted Results
Adjusted operating income rose to $47.1M for fiscal 2026, up 32% from $35.8M a year ago. Adjusted EBITDA was $151.5M, up 4% year-over-year and up 15% on a comparable basis reflecting the sale-leaseback impact. Fourth-quarter adjusted net income was $45.9M (vs. $22.9M prior year) and adjusted diluted EPS improved to $2.19 from $0.87, supported by tax strategies and share repurchases.
Read all positive updates
Company Guidance
Scholastic guided fiscal 2027 to revenue growth of roughly 2–4% versus FY26 reported revenue (~$1.6B) and adjusted EBITDA of $135–$145M (midpoint ≈6% growth vs FY26 comparable adjusted EBITDA of $132.4M), with a full‑year effective tax rate of ~27–30% (state taxes ~4–6%) and free cash flow of about $35–$40M (FY26 FCF was $436M, driven by >$400M net sale‑leaseback proceeds); they expect Q1 revenues to be slightly down with year‑over‑year growth beginning in Q2, a modestly larger seasonal Q1 operating loss due to sale‑leaseback timing, planned increases in capex and prepublication spend, continued cost discipline, a long‑term net leverage target of 2.0–2.5x adjusted EBITDA, $183M remaining repurchase authorization, and a 25% dividend increase to $0.25 per share.Scholastic Financial Statement Overview
Summary
Income Statement
55
Neutral
Balance Sheet
48
Neutral
Cash Flow
42
Neutral
| Breakdown | May 2026 | May 2025 | May 2024 | May 2023 | May 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.58B | 1.63B | 1.59B | 1.70B | 1.64B |
| Gross Profit | 833.30M | 906.70M | 884.60M | 917.60M | 877.40M |
| EBITDA | 183.00M | 105.30M | 85.10M | 178.40M | 157.50M |
| Net Income | 56.70M | -1.90M | 12.10M | 86.30M | 81.00M |
Balance Sheet | |||||
| Total Assets | 1.73B | 1.95B | 1.67B | 1.95B | 1.94B |
| Cash, Cash Equivalents and Short-Term Investments | 134.90M | 124.00M | 113.70M | 224.50M | 316.60M |
| Total Debt | 387.50M | 374.50M | 122.10M | 103.20M | 97.10M |
| Total Liabilities | 977.30M | 1.00B | 653.10M | 786.80M | 722.40M |
| Stockholders Equity | 750.80M | 946.50M | 1.02B | 1.16B | 1.22B |
Cash Flow | |||||
| Free Cash Flow | 2.50M | 72.00M | 96.20M | 86.90M | 184.00M |
| Operating Cash Flow | 50.90M | 124.20M | 154.60M | 148.90M | 226.00M |
| Investing Cash Flow | 405.80M | -252.90M | -89.70M | -99.60M | -43.20M |
| Financing Cash Flow | -446.00M | 137.30M | -176.10M | -139.50M | -229.20M |
Scholastic Technical Analysis
Negative
39.95
Price Trends
43.34
Negative
41.97
Negative
37.15
Positive
Market Momentum
-0.94
Positive
37.08
Neutral
16.40
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SCHL, the sentiment is Negative. The current price of 39.95 is below the 20-day moving average (MA) of 41.18, below the 50-day MA of 43.34, and above the 200-day MA of 37.15, indicating a neutral trend. The MACD of -0.94 indicates Positive momentum. The RSI at 37.08 is Neutral, neither overbought nor oversold. The STOCH value of 16.40 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SCHL.
Scholastic Risk Analysis
Scholastic disclosed 28 risk factors in its most recent earnings report. Scholastic reported the most risks in the "Ability to Sell" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Scholastic Peers Comparison
UnderperformOutperform
Sector (60)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $11.07B | 28.27 | 19.47% | 1.14% | 10.76% | 23.78% | |
64 Neutral | $9.89B | 23.87 | 9.13% | 2.10% | 7.10% | -22.39% | |
60 Neutral | $48.67B | 4.58 | -11.27% | 4.14% | 2.83% | -41.78% | |
60 Neutral | $11.59M | 3.89 | 7.17% | ― | -34.31% | ― | |
52 Neutral | $189.04M | -5.34 | 38.98% | ― | -11.12% | 72.31% | |
51 Neutral | $777.37M | 16.31 | 6.61% | 1.85% | -2.68% | ― |
* Communication Services Sector Average
SCHL
Scholastic
39.11
13.61
53.39%
EDUC
Educational Development
1.36
0.25
22.52%
LEE
Lee Enterprises
8.26
3.95
91.65%
NYT
New York Times
68.12
9.08
15.37%
PSO
Pearson
16.66
2.36
16.51%
Scholastic Corporate Events
Business Operations and StrategyStock Buyback
Scholastic Executes Targeted Share Repurchase From Former CEO Estate
Positive
Aug 27, 2026
On August 26, 2026, Scholastic Corporation repurchased 289,624 common shares from the Estate of former chairman and CEO M. Richard Robinson Jr. in a private transaction at $39.7603 per share, a 3% discount to the prior day’s closing price, f...
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.