Cengage Learning Holdings II Inc (CNGO)
OTHER OTC:CNGO
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Cengage Learning Holdings II
(OTC:CNGO)
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Rating:49Neutral
Price Target:
$23.50
▲(0.00% Upside)
Action:ReiteratedDate:02/20/26
The score is held back primarily by weak financial performance (declining revenue, net losses, and balance-sheet strain from negative equity). The earnings call provides a meaningful offset due to improving adjusted cash EBITDA, cash flow, and deleveraging progress, while technicals look stretched and valuation is unattractive given the negative P/E and no stated dividend yield.
Positive Factors
Digital-first Revenue Mix
A ~90% digital mix and launch of a unified K‑12 platform indicate durable structural shift to recurring, scalable digital delivery. This reduces marginal costs, enables subscription and analytics upsell, and supports steadier revenue visibility versus one-off print cycles over the next several quarters.
Negative Factors
Balance Sheet Strain
Negative equity and a high debt-to-equity profile indicate structural balance-sheet vulnerability. Even with deleveraging progress, the reliance on debt financing elevates refinancing and covenant risk, limiting strategic optionality and increasing sensitivity to slower cash flow scenarios over the medium term.
Read all positive and negative factors
Positive Factors
Negative Factors
Digital-first Revenue Mix
A ~90% digital mix and launch of a unified K‑12 platform indicate durable structural shift to recurring, scalable digital delivery. This reduces marginal costs, enables subscription and analytics upsell, and supports steadier revenue visibility versus one-off print cycles over the next several quarters.
Read all positive factors
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)8.9
Beta (1Y)0.09
Revenue Growth0.49%
EPS Growth62.65%
CountryUS
Employees4,400
SectorCommunication Services
Sector Strength97
IndustryPublishing
Share Statistics
EPS (TTM)0.33
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 Cap1.91
Enterprise Value/Revenue1.87
Enterprise Value/Gross Profit3.54
Enterprise Value/Ebitda7.57
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 Description
Cengage 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; Cenga...
How the Company Makes Money
Cengage 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 acc...
Cengage Learning Holdings II Earnings Call Summary
Earnings Call Date:Feb 19, 2026
(Q3-2026)
| Next Earnings Date:Jun 04, 2026
Earnings Call Sentiment Positive
The call conveyed a largely positive operational and financial trajectory: strong Q3 revenue (+10%) and a return to positive quarterly adjusted cash EBITDA (+$18M) driven by U.S. Higher Education and Work (notably ed2Go). TTM revenue and EBITDA improved, leverage declined to 2.5x, and strategic investments in AI, platform products and partnerships were emphasized. Headwinds remain in specific subsegments (InfoSec/Milady), a low K-12 adoption year affecting ELL and seasonality/transition effects from prior ERP rollout and print-to-digital migration. Overall, the positives—broad-based revenue growth, EBITDA improvement, deleveraging, and clear AI/digital execution—outweigh the localized challenges.Positive Updates
Quarterly Revenue Growth
Q3 adjusted cash revenues of $245 million, up $22 million or 10% year-over-year, driven by growth across Nearly all segments.
Negative Updates
Federal Regulatory and Immigration Headwinds
InfoSec and Milady (cybersecurity and Beauty & Wellness) remain challenged due to federal regulatory headwinds and immigration-related impacts on enrollment, resulting in year-over-year declines and a still-challenged near-term outlook.
Read all updates
Q3-2026 Updates
Positive
Negative
Quarterly Revenue Growth
Q3 adjusted cash revenues of $245 million, up $22 million or 10% year-over-year, driven by growth across Nearly all segments.
Read all positive updates
Company Guidance
Management’s forward-looking message emphasized continued deleveraging, stronger liquidity and ongoing revenue/EBITDA expansion: net leverage is down 0.2x to 2.5x and management expects it to improve further as Q4 cash collections ramp and restructuring costs decline; free cash flow improved by ~$10M year-over-year in Q3; term‑loan repricing cut funding costs by 50 bps for an incremental ~$8M of annual interest savings (>$20M total since Mar‑2024). They expect growth to be driven by Higher Ed and Work after Q3 adjusted cash revenue rose 10% to $245M and adjusted cash EBITDA improved $21M to +$18M; TTM adjusted cash revenue was $1.53B (+3%) and TTM adjusted cash EBITDA $532M (+6%) with ~71% flow‑through. Key segment momentum cited: U.S. Higher Ed +20% Q3, Higher Ed +15% Q3, institutional sales ≈$250M YTD (+23%, now 56% of U.S. Higher Ed), ed2Go +24% Q3/+26% YTD, CTE +14% Q3, School +17% Q3, while ELL is impacted by a $6M one‑off (normalized down ~5% YTD).Cengage Learning Holdings II Financial Statement Overview
Summary
Income Statement
45
Neutral
Balance Sheet
30
Negative
Cash Flow
55
Neutral
| Breakdown | TTM | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 | Mar 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.50B | 1.48B | 1.50B | 1.42B | 1.37B | 1.24B |
| Gross Profit | 790.20M | 840.50M | 805.70M | 604.20M | 586.70M | 492.60M |
| EBITDA | 370.00M | 323.80M | 331.80M | 385.70M | 356.10M | 287.60M |
| Net Income | -46.30M | -114.40M | -80.90M | -40.20M | -44.60M | -110.10M |
Balance Sheet | ||||||
| Total Assets | 2.58B | 2.45B | 2.60B | 2.65B | 2.73B | 2.74B |
| Cash, Cash Equivalents and Short-Term Investments | 181.90M | 256.40M | 264.90M | 269.30M | 348.00M | 457.50M |
| Total Debt | 1.71B | 1.67B | 1.68B | 2.20B | 2.30B | 2.30B |
| Total Liabilities | 2.63B | 2.49B | 2.49B | 2.96B | 2.99B | 2.96B |
| Stockholders Equity | -57.00M | -48.10M | 114.70M | -308.80M | -258.20M | -212.30M |
Cash Flow | ||||||
| Free Cash Flow | 119.50M | 163.90M | 48.20M | 26.40M | 93.30M | 161.70M |
| Operating Cash Flow | 156.20M | 199.90M | 166.50M | 155.80M | 205.90M | 273.30M |
| Investing Cash Flow | -150.00M | -151.50M | -120.80M | -132.20M | -296.30M | -113.50M |
| Financing Cash Flow | -70.80M | -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
23.50
Neutral
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 equal to the 200-day MA of 23.50, 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 |
|---|---|---|---|---|---|---|---|
70 Outperform | $2.00B | 13.74 | 20.75% | 4.48% | -5.33% | ― | |
66 Neutral | $852.30M | 3.53 | 6.91% | 2.78% | 2.53% | -23.86% | |
64 Neutral | $8.16B | 20.71 | 9.26% | 2.11% | 1.93% | 34.40% | |
60 Neutral | $48.67B | 4.58 | -11.27% | 4.14% | 2.83% | -41.78% | |
59 Neutral | $183.03M | -1.01 | 61.72% | ― | -8.02% | -44.34% | |
49 Neutral | $1.47B | 8.95 | 122.57% | ― | 0.49% | 62.65% |
* Communication Services Sector Average
CNGO
Cengage Learning Holdings II
23.50
2.75
13.25%
WLY
John Wiley Sons Cl A
39.05
-1.40
-3.45%
LEE
Lee Enterprises
8.23
-1.30
-13.64%
PSO
Pearson
13.31
-1.67
-11.12%
SCHL
Scholastic
39.20
21.52
121.74%
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.