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Cengage Learning Holdings II Inc (CNGO)
OTHER OTC:CNGO
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Cengage Learning Holdings II
(OTC:CNGO)
Rating:58Neutral
Price Target:―
Cengage Learning Holdings II (CNGO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.47B
Dividend YieldN/A
Average Volume (3M)0.00
Price to Earnings (P/E)―
Beta (1Y)0.07
Revenue Growth-2.01%
EPS Growth-48.45%
CountryUS
Employees4,400
SectorServices
Sector StrengthN/A
IndustryPublishing
Share Statistics
EPS (TTM)-0.39
Shares Outstanding62,400,000
10 Day Avg. Volume0
30 Day Avg. Volume0
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)0.00
Price to Sales (P/S)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap2.19
Enterprise Value/Revenue2.17
Enterprise Value/Gross Profit4.40
Enterprise Value/Ebitda10.97
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, Inc., together with its subsidiaries, operates as an education technology company worldwide. The company operates through three segments: Cengage Academic, Cengage Work, and Cengage Select. It offers eTextbooks; Cengage Unlimited, a subscription service for digital higher education materials; eTextbook subscription service; Cengage Infuse, an embedded course kit with a user experience for instructors; print textbooks, study guides, laboratory exercises, instructor editions, and supplemental products; and course and custom content development, and direct assistance to instructors and students for implementation and ongoing use of digital and print solutions. The company also provides various platforms, such as MindTap for as business and economics, social sciences, trades, and skills; WebAssign for mathematics and physics; Skills Assessment Manager for introductory computing; Cengage NOW for accounting; and Online Web-Based Learning for such as chemistry. In addition, it offers ed2go, an online learning platform; K-12, public, and academic libraries under the Gale brand, as well as licenses its proprietary and third-party content for integration with web-based information providers; English language curriculum and digital solutions under the NGL brand; educational resources for career-focused beauty and wellness education providers; and literacy materials to K-6 students under the Nelson brand. Further, the company Infosec, a cybersecurity education platform comprising Bootcamps, which provides instructor-led, digital course experiences for cybersecurity certifications or skill sets; Infosec Skills that offers training for reskilling and upskilling in the cybersecurity profession; and Infosec IQ, which offers security awareness training for non-technical learners to recognize, avoid, and report cyber-attacks and security incidents. The company was founded in 1903 and is headquartered in Boston, Massachusetts.
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 Earnings Call Summary
Earnings Call Date:Aug 07, 2025
(Q4-2025)
| % Change Since: 0.00%|
Next Earnings Date:Nov 06, 2025
Earnings Call Sentiment Positive
The earnings call reflects a generally positive outlook with strong performance in key growth areas such as U.S. Higher Ed and Cengage Work, alongside successful digital transitions and promising AI initiatives. However, these are tempered by challenges in international markets and specific business segments facing revenue declines.Q4-2025 Updates
Positive Updates
Fourth Consecutive Year of Growth
Cengage Group delivered a fourth consecutive year of growth with adjusted cash revenue up 1% as reported and up 2% on an underlying basis. Adjusted cash EBITDA is up 15%, resulting in a strong EBITDA margin of 34%.
Strong Performance in Cengage Work
Cengage Work continues to be a standout performer with adjusted cash revenue up 14%. Ed2go delivered its 11th consecutive quarter of high double-digit growth, ending the year with a 23% increase in adjusted cash revenue year-over-year.
U.S. Higher Ed Business Growth
U.S. Higher Ed business continued to accelerate revenue growth with its adjusted cash revenue up 7% year-over-year. Institutional revenues, which account for 51% of Higher Ed revenues, were up 22% year-on-year.
Digital Transition Success
The transition from print to digital is now substantively complete, with digital net sales up 6% year-on-year, representing 79% of total sales. This strengthened the product profile of the U.S. Higher Ed, increasing profitability and customer retention.
Generative AI Initiatives
Cengage Group made significant strides in the application of generative AI, with tools such as the Gen AI-powered Student Assistant and AI-powered faculty insight dashboard being introduced, aimed at enhancing learning and teaching experiences.
Negative Updates
Cengage Select Revenue Decline
Adjusted cash revenue for Cengage Select were down 6% versus the prior year, largely due to the expiration of a large government contract in the Middle East.
International Higher Ed and Secondary Products
International Higher Ed and secondary products cash revenues were down a combined 8.5% year-on-year, impacted by factors such as a decline in Canadian student enrollment and softness in EMEA and Asia markets.
Research Business Challenges
Research Q4 performance was down 20% year-on-year, with delays in China renewals and lower activity at leading U.S. research universities due to federal announcements affecting research funding.
Infosec Revenue Impact
Infosec Q4 revenues were negatively impacted by delays in key software renewals and federal government restrictions on procurement cards, reducing boot camp sales.
Company Guidance
During the Cengage Group's Fiscal 2025 Fourth Quarter and Full Year Investor Update, several key metrics were highlighted. The company reported a fourth consecutive year of growth, with adjusted cash revenue up 1% as reported and 2% on an underlying basis. Adjusted cash EBITDA increased by 15%, resulting in a strong EBITDA margin of 34%. The Cengage Academic business grew adjusted cash revenue by 2%, with the U.S. Higher Ed business seeing a 7% year-over-year increase in adjusted cash revenue. Institutional revenues for the Higher Ed segment now account for 51% of its fiscal year '25 revenues. The Cengage Work business witnessed a 14% rise in adjusted cash revenue, driven by ed2go's 23% year-over-year growth. Conversely, Cengage Select's adjusted cash revenue fell by 6%, primarily due to the expiration of a significant government contract in the Middle East. Digital net sales rose to represent 79% of total sales, highlighting a successful transition from print to digital. The company's financial performance has enabled over $60 million in savings, with plans to reach over $100 million by the end of fiscal '26, while maintaining a net leverage ratio of 2.6x. Looking forward, Cengage aims to sustain revenue and EBITDA growth through cost discipline and operational efficiency.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 |
| EBITDA | 293.00M | 331.80M | 385.70M | 356.10M | 287.60M | -479.60M |
| Net Income | -71.90M | -80.90M | -40.20M | -44.60M | -110.10M | -908.90M |
Balance Sheet | ||||||
| Total Assets | 2.60B | 2.60B | 2.65B | 2.73B | 2.74B | 2.83B |
| Cash, Cash Equivalents and Short-Term Investments | 233.10M | 264.90M | 269.30M | 348.00M | 457.50M | 366.00M |
| Total Debt | 2.20B | 1.68B | 2.20B | 2.30B | 2.30B | 2.37B |
| Total Liabilities | 2.90B | 2.49B | 2.96B | 2.99B | 2.96B | 2.96B |
| Stockholders Equity | -298.10M | 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
23.50
Price Trends
23.50
Neutral
22.13
Positive
20.94
Positive
Market Momentum
0.06
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 23.5 is equal to the 20-day moving average (MA) of 23.50, equal to the 50-day MA of 23.50, and above the 200-day MA of 20.94, indicating a neutral trend. The MACD of 0.06 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 (66)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $9.18B | 16.79 | 11.74% | 2.06% | 1.93% | 34.40% | |
73 Outperform | $9.80B | 30.97 | 17.13% | 1.05% | 7.82% | 19.39% | |
70 Neutral | $2.12B | 25.77 | 11.28% | 3.56% | -10.43% | ― | |
66 Neutral | $650.04M | 37.85 | -0.19% | 3.09% | 2.25% | -103.50% | |
66 Neutral | €4.07B | 17.15 | -2.44% | 3.86% | 1.88% | -16.39% | |
58 Neutral | $1.47B | ― | -343.54% | ― | -2.01% | -48.45% | |
42 Neutral | $9.24M | ― | -12.07% | ― | -32.68% | -3656.21% |
* Services Sector Average
Performance Comparison
CNGO
Cengage Learning Holdings II
23.50
5.75
32.39%
EDUC
Educational Development
1.11
-0.86
-43.65%
WLY
John Wiley Sons Cl A
39.65
-4.22
-9.62%
NYT
New York Times
59.28
5.24
9.70%
PSO
Pearson
14.53
1.32
9.99%
SCHL
Scholastic
25.88
-3.62
-12.27%
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.