Education
About Us
Working with TipRanks
Follow Us
Cengage Learning Holdings II Inc (CNGO)
OTHER OTC:CNGO
Top Page
Cengage Learning Holdings II
(OTC:CNGO)
Select Model
Select Model
Rating:46Neutral
Price Target:
$23.00
▼(-2.13% Downside)
Cengage Learning Holdings II's overall stock score is primarily impacted by its financial performance challenges, including declining revenues and high leverage. Technical analysis indicates potential overbought conditions, while valuation metrics are weak due to negative earnings. The earnings call provides some optimism with growth in certain segments, but overall, the stock faces significant risks.
Positive Factors
Digital and AI Initiatives
The launch of digital and AI initiatives positions Cengage as a leader in educational technology, enhancing its product offerings and competitive edge.
Growth in Work Segment
Significant growth in the Work segment indicates strong demand for professional development solutions, supporting long-term revenue diversification.
Positive Cash Flow Trends
Improved cash generation enhances financial flexibility, allowing Cengage to invest in growth initiatives and manage debt more effectively.
Negative Factors
Decline in Revenue
A declining revenue trend poses a risk to long-term financial stability, potentially limiting the ability to invest in growth and innovation.
High Leverage
High leverage increases financial risk, potentially constraining operational flexibility and increasing vulnerability to economic downturns.
Technical and Cash Flow Challenges
Technical issues affecting cash flow highlight operational inefficiencies that could hinder financial performance and strategic execution.
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)0.05
Revenue Growth0.49%
EPS Growth62.65%
CountryUS
Employees4,400
SectorCommunication Services
Sector Strength97
IndustryPublishing
Share Statistics
EPS (TTM)0.58
Shares Outstanding62,400,000
10 Day Avg. Volume0
30 Day Avg. Volume0
Financial Highlights & Ratios
PEG Ratio-0.27
Price to Book (P/B)-27.01
Price to Sales (P/S)0.88
P/FCF Ratio7.93
Enterprise Value/Market Cap1.59
Enterprise Value/Revenue1.58
Enterprise Value/Gross Profit3.01
Enterprise Value/Ebitda7.53
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusN/A
Number of Analyst Covering0
EPS Forecast (FY)N/A
Revenue Forecast (FY)N/A
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 generates revenue through multiple streams, primarily by selling educational content and technology solutions. The company earns money from the sale of textbooks, both in physical and digital formats, as well as from subscription-based access to its digital learning platforms, such as Cengage Unlimited, which allows students to access a broad range of materials for a flat fee. Additionally, Cengage partners with educational institutions to provide customized learning solutions and analytics services, which also contribute to its revenue. The company's ability to adapt to evolving educational trends and invest in digital technology plays a crucial role in sustaining its earnings and expanding its market share.
Cengage Learning Holdings II Earnings Call Summary
Earnings Call Date:Nov 18, 2025
(Q2-2026)
| Next Earnings Date:Feb 05, 2026
Earnings Call Sentiment Neutral
The earnings call presented a mixed outlook with significant growth in key segments such as U.S. Higher Education and the Work segment, driven by digital transformation and AI initiatives. However, challenges in the School and English Language Learning segments due to market conditions and technical issues affecting cash flow balance the positive developments.Q2-2026 Updates
Positive Updates
Strong U.S. Higher Education Performance
U.S. Higher Ed adjusted cash revenue was up 4% year-over-year, driven by continued digital growth of 7%. Institutional sales were over $200 million year-to-date, up 20% year-on-year.
Growth in Work Segment
The work segment saw first half adjusted cash revenue up 28%, with Q2 adjusted cash revenues up 9% year-on-year. ed2go was a significant contributor, up 32% year-on-year for the quarter.
Digital and AI Initiatives
Launch of new unified digital platform Explore, and generative AI products like Student Assistant 2.0 are live in over 100 products. Instructor Assistant is on track for release in January 2026.
Negative Updates
Decline in School and English Language Learning Segments
School and English Language Learning segments faced a low adoption year, funding restrictions, and political climate challenges, resulting in adjusted cash revenues declining by 4% and 19% year-on-year respectively.
Technical and Cash Flow Challenges
Technical issues with the new SAP accounting system delayed invoicing and collections, impacting H1 cash flow. A $42 million year-on-year change in leveraged free cash flow was noted.
Impact from Federal Policy and Government Shutdown
Infosec and Milady businesses declined 5% year-on-year due to federal budgeting pressures and the recent immigration policy.
Company Guidance
In the Cengage Group's second quarter fiscal year 2026 call, the company reported a slight decline in adjusted cash revenue of 2% year-over-year, totaling $872 million, while adjusted cash EBITDA decreased by 8%. The U.S. Higher Education segment performed well, with a 4% increase in first-half adjusted cash revenue, driven by a 7% growth in digital sales. The Work segment experienced robust growth, with a 28% increase in first-half adjusted cash revenue, showcasing the success of its ed2go initiative. However, the K-12 and English Language Learning segments faced challenges due to a low adoption year and funding restrictions, impacting overall results. The company emphasized a strategic focus on generative AI, launching new digital platforms, and preparing for the implementation of Workforce Pell in July 2026. Despite headwinds, Cengage remains committed to sustainable growth, leveraging digital acceleration and operational efficiencies to enhance its financial performance.Cengage Learning Holdings II Financial Statement Overview
Summary
Cengage Learning Holdings II faces challenges with declining revenues and persistent net losses, impacting its financial stability. While operational efficiency is evident, high leverage and negative equity raise concerns about financial health. Positive cash flow trends offer some optimism, but the company needs to address profitability and leverage issues to improve its financial standing.Income Statement
Cengage Learning Holdings II shows a declining revenue trend with a negative revenue growth rate of -7.4% in the most recent year. The gross profit margin is relatively strong at 56.8%, but the company struggles with profitability, as indicated by a negative net profit margin of -7.7%. The EBIT and EBITDA margins are moderate at 15% and 21.9%, respectively, suggesting operational efficiency but insufficient to offset net losses.45
Neutral
Balance Sheet
The balance sheet reveals significant financial leverage with a high debt-to-equity ratio due to negative stockholders' equity. This indicates potential financial instability. The equity ratio is negative, reflecting the company's reliance on debt financing. Return on equity is also negative, further highlighting profitability challenges.30
Negative
Cash Flow
Cash flow analysis shows a positive free cash flow growth rate of 23%, indicating improved cash generation. The operating cash flow to net income ratio is positive, suggesting that the company generates cash from operations despite net losses. However, the free cash flow to net income ratio is low, indicating limited cash available after capital expenditures.55
Neutral
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.48B | 1.48B | 1.50B | 1.42B | 1.37B | 1.24B |
| Gross Profit | 775.30M | 840.50M | 805.70M | 604.20M | 586.70M | 492.60M |
| EBITDA | 310.10M | 323.80M | 331.80M | 385.70M | 356.10M | 287.60M |
| Net Income | -110.10M | -114.40M | -80.90M | -40.20M | -44.60M | -110.10M |
Balance Sheet | ||||||
| Total Assets | 2.31B | 2.45B | 2.60B | 2.65B | 2.73B | 2.74B |
| Cash, Cash Equivalents and Short-Term Investments | 147.30M | 256.40M | 264.90M | 269.30M | 348.00M | 457.50M |
| Total Debt | 1.66B | 1.67B | 1.68B | 2.20B | 2.30B | 2.30B |
| Total Liabilities | 2.40B | 2.49B | 2.49B | 2.96B | 2.99B | 2.96B |
| Stockholders Equity | -83.30M | -48.10M | 114.70M | -308.80M | -258.20M | -212.30M |
Cash Flow | ||||||
| Free Cash Flow | 199.60M | 163.90M | 48.20M | 26.40M | 93.30M | 161.70M |
| Operating Cash Flow | 236.10M | 199.90M | 166.50M | 155.80M | 205.90M | 273.30M |
| Investing Cash Flow | -151.80M | -151.50M | -120.80M | -132.20M | -296.30M | -113.50M |
| Financing Cash Flow | -70.10M | -55.60M | -50.10M | -100.80M | -18.70M | -70.30M |
Cengage Learning Holdings II Technical Analysis
Positive
23.50
Price Trends
23.50
Neutral
23.50
Neutral
22.89
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 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 22.89, 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
UnderperformOutperform
Sector (60)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $7.96B | 14.47 | 11.74% | 2.11% | 1.93% | 34.40% | |
69 Neutral | $1.63B | 16.45 | 13.61% | 4.48% | -5.33% | ― | |
65 Neutral | $875.19M | -174.89 | -0.35% | 2.78% | 2.53% | -23.86% | |
60 Neutral | $48.67B | 4.58 | -11.27% | 4.14% | 2.83% | -41.78% | |
52 Neutral | $31.78M | -0.82 | ― | ― | -8.02% | -44.34% | |
46 Neutral | $1.47B | -31.72 | ― | ― | 0.49% | 62.65% |
* Communication Services Sector Average
CNGO
Cengage Learning Holdings II
23.50
4.00
20.51%
WLY
John Wiley Sons Cl A
30.94
-11.85
-27.69%
LEE
Lee Enterprises
5.09
-7.06
-58.11%
PSO
Pearson
12.46
-3.02
-19.51%
SCHL
Scholastic
34.40
15.00
77.32%
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.