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Cengage Learning Holdings II Inc (CNGO)
OTHER OTC:CNGO
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Cengage Learning Holdings II
(OTC:CNGO)
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Rating:58Neutral
Price Target:―
Cengage Learning Holdings II's stock score of 58 reflects a mix of strengths and challenges. Key positives include strong cash flow management and a positive growth outlook from recent earnings guidance. However, high financial leverage, a negative P/E ratio, and overbought technical conditions weigh down the score. The company shows potential for improvement but faces significant financial risks.
Positive Factors
Cash Flow Management
Strong cash flow management indicates efficient operations and the ability to sustain business activities despite net losses, providing financial stability.
Strategic Acquisitions
Strategic acquisitions and partnerships enhance product offerings and market reach, supporting long-term growth and competitive positioning.
Cost Savings Initiatives
Successful cost savings initiatives improve profitability and operational efficiency, positioning the company better for future financial health.
Negative Factors
High Financial Leverage
High financial leverage increases risk, potentially limiting the company's ability to invest in growth opportunities and manage economic downturns.
Profitability Challenges
Ongoing profitability challenges can hinder the company's ability to reinvest in its business and may affect long-term sustainability.
Decline in International Revenue
Revenue decline in international markets suggests challenges in global competitiveness and market penetration, impacting overall growth potential.
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)0.04
Revenue Growth0.49%
EPS Growth62.65%
CountryUS
Employees4,400
SectorServices
Sector StrengthN/A
IndustryPublishing
Share Statistics
EPS (TTM)N/A
Shares Outstanding62,400,000
10 Day Avg. Volume0
30 Day Avg. Volume0
Financial Highlights & Ratios
PEG Ratio-0.10
Price to Book (P/B)7.22
Price to Sales (P/S)0.55
P/FCF Ratio17.18
Enterprise Value/Market Cap0.00
Enterprise Value/Revenue0.00
Enterprise Value/Gross Profit0.00
Enterprise Value/Ebitda0.00
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, known as Cengage, is a prominent education and technology company that operates primarily in the United States. The company focuses on providing high-quality educational content, digital learning solutions, and personalized learning experiences for students and educators. Cengage's core products and services include textbooks, online learning platforms, and digital course solutions, serving a wide range of educational institutions from K-12 to higher education.
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: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 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 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 | Dec 2019 |
|---|---|---|---|---|---|---|
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 | 350.40M |
| Net Income | -71.90M | -80.90M | -40.20M | -44.60M | -110.10M | -908.90M |
Balance Sheet | ||||||
| Total Assets | 2.51B | 2.60B | 2.65B | 2.73B | 2.74B | 2.83B |
| Cash, Cash Equivalents and Short-Term Investments | 294.10M | 264.90M | 269.30M | 348.00M | 457.50M | 366.00M |
| Total Debt | 1.67B | 1.68B | 2.20B | 2.30B | 2.30B | 2.37B |
| Total Liabilities | 2.47B | 2.49B | 2.96B | 2.99B | 2.96B | 2.96B |
| Stockholders Equity | 37.30M | 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
23.50
Neutral
22.48
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 22.48, 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 (55)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $8.32B | 15.20 | 11.74% | 2.27% | 1.93% | 34.40% | |
66 Neutral | $1.96B | 20.71 | 13.45% | 3.73% | -8.50% | ― | |
58 Neutral | $1.47B | ― | ― | ― | 0.49% | 62.65% | |
58 Neutral | $756.17M | ― | -1.14% | 2.72% | 0.97% | -197.80% | |
58 Neutral | ― | ― | 44.25% | ― | -8.56% | ― | |
55 Neutral | $13.29B | 17.42 | 10.03% | 0.93% | 7.13% | -12.93% | |
45 Neutral | $24.73M | ― | ― | ― | -8.02% | -44.34% |
* Services Sector Average
CNGO
Cengage Learning Holdings II
23.50
4.00
20.51%
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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.