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Educational Development Corp. (EDUC)
NASDAQ:EDUC
US Market
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Educational Development (EDUC) AI Stock Analysis

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EDUC

Educational Development

(NASDAQ:EDUC)

Rating:49Neutral
Price Target:
$1.50
▲(11.11%Upside)
The low overall score is primarily driven by the company's poor financial performance, characterized by declining revenues, sustained losses, and negative profitability metrics. Technical analysis and earnings call insights provide slight moderation, indicating stability in stock price and strategic efforts to mitigate financial challenges. However, the valuation remains unattractive due to negative earnings and lack of dividends, emphasizing the need for substantial operational improvements.

Educational Development (EDUC) vs. SPDR S&P 500 ETF (SPY)

Educational Development Business Overview & Revenue Model

Company DescriptionEducational Development Corporation, a publishing company, operates as a trade co-publisher of educational children's books in the United States. It operates through two segments, Publishing and Usborne Books & More (UBAM). The company offers various books, including touchy-feely board books, activity books and flashcards, adventure and search books, art books, sticker books, and foreign language books, as well as internet-linked books comprising science and math titles, and chapter books and novels. Educational Development Corporation markets its products to retail accounts, which include book, school supply, toy and gift stores and museums, through commissioned sales representatives, trade and specialty wholesalers, and its internal tele-sales group; and through a network of independent sales consultants through internet sales, direct sales, home shows, and book fairs. Educational Development Corporation was incorporated in 1965 and is headquartered in Tulsa, Oklahoma.
How the Company Makes MoneyEducational Development Corporation makes money through the sale of children's books via two primary channels: retail and direct selling. In the retail channel, EDUC distributes its products to a variety of retailers, including independent bookstores, major book chains, and online platforms. The direct selling channel operates under the Usborne Books & More brand, where independent consultants sell books directly to consumers through home parties, book fairs, and online events. This dual-channel approach allows EDUC to reach a broad audience and leverage various sales strategies. The company's revenue is also supported by partnerships with schools and libraries, which contribute to bulk purchasing agreements and recurring orders.

Educational Development Earnings Call Summary

Earnings Call Date:Jul 07, 2025
(Q4-2025)
|
% Change Since: 0.00%|
Next Earnings Date:Oct 09, 2025
Earnings Call Sentiment Negative
The earnings call highlighted efforts to boost sales and engagement through promotions and new programs, but these were overshadowed by a significant decrease in revenues, active brand partners, and profitability. The sale of the Hilti Complex is a positive step towards debt reduction, yet the overall performance metrics and market challenges indicate significant hurdles ahead.
Q4-2025 Updates
Positive Updates
Successful Book Friday Promotion
The Book Friday promotion offered deep discounts and was met with strong engagement, moving excess inventory and generating cash flow.
Launch of 'The Pass' Shipping Subscription
The new shipping subscription program, 'The Pass,' was successfully launched, enhancing customer experience and encouraging repeat purchases.
Hilti Complex Sale Agreement
A purchase sale agreement for the Hilti Complex was executed with a buyer, expected to fully pay back the bank debt.
Negative Updates
Decrease in Net Revenues
Fourth-quarter net revenues were $6.6 million compared to $9 million the previous year, and year-to-date net revenues totaled $34.2 million compared to $51 million.
Decline in Active Brand Partners
Average active PaperPie Brand Partners decreased to 9,400 from 15,500 in the fourth quarter, and year-to-date totals fell to 12,300 from 18,300.
Loss Before Income Taxes
The loss before income taxes for the fiscal year totaled $6.9 million compared to income before taxes of $700,000 the previous year.
Sale of Hilti Complex Below Previous Offer
The sale price of $35,150,000 for the Hilti Complex was below the previous offer, although net proceeds are expected to be similar.
Company Guidance
During the fiscal fourth quarter of 2025, Educational Development Corporation (EDC) experienced a decrease in sales, with net revenues dropping to $6.6 million from $9 million in the same period last year. The number of active PaperPie Brand Partners decreased significantly from 15,500 to 9,400. Despite the sales decline, the company's loss before income taxes improved, totaling $1.5 million compared to $2.2 million in the previous year. For the full fiscal year, net revenues were $34.2 million, a decrease from $51 million last year, and the average active brand partners dropped from 18,300 to 12,300. EDC reported a net loss of $5.3 million, contrasting with a $500,000 profit in the prior year. The company is focusing on strategic changes, such as offering discounts to boost cash flow and reduce bank debt, as well as launching new initiatives like The Pass shipping subscription to enhance customer loyalty. Additionally, EDC is in the process of selling its Hilti Complex headquarters, aiming to use the proceeds to eliminate its bank debt and strengthen its financial position.

Educational Development Financial Statement Overview

Summary
Educational Development is facing substantial financial challenges with declining revenues and sustained losses impacting profitability. While cost management efforts have stabilized gross margins, negative operating margins and declining equity raise concerns about future viability. The balance sheet reflects manageable leverage, but the negative ROE and declining asset base are worrying. Cash flow management shows some resilience, with positive free cash flow providing a buffer against ongoing losses. Overall, the company needs to address its revenue decline and operational inefficiencies to improve its financial health.
Income Statement
45
Neutral
The company is experiencing a challenging period with declining revenues and negative profitability. The TTM data shows a significant drop in total revenue to $31.3 million from $87.8 million in 2023, reflecting a revenue decline over time. The gross profit margin is at 59.76%, indicating better cost management at the gross level, but the net profit margin is negative due to continued net losses, highlighting struggles with operating expenses and interest costs. The EBIT margin and EBITDA margin are both negative, indicating operational difficulties and a reliance on cost savings at the EBITDA level.
Balance Sheet
50
Neutral
The balance sheet shows a moderate position with a Debt-to-Equity Ratio of 0.79, suggesting a manageable level of leverage. However, the Return on Equity (ROE) is negative due to net losses, showing inefficiencies in generating returns from equity. The equity ratio is 51.75%, indicating a reasonable level of equity financing relative to total assets, but the declining assets and equity over the period raise concerns about long-term stability.
Cash Flow
55
Neutral
The company demonstrates some positive cash flow management with a Free Cash Flow of $2.87 million in the TTM, showing improvement from the previous year. The Operating Cash Flow to Net Income Ratio is negative, reflecting operational cash flow generation despite net losses. However, the Free Cash Flow to Net Income Ratio is positive, indicating that the company is managing to convert its losses into free cash flow, providing some cushion despite profitability issues.
BreakdownMar 2025Mar 2024Mar 2023Mar 2022Mar 2021
Income Statement
Total Revenue34.19M51.03M87.83M142.23M204.64M
Gross Profit21.03M32.98M56.07M97.93M144.60M
EBITDA-2.94M5.98M1.22M14.28M19.43M
Net Income-5.26M546.40K-2.50M8.31M12.62M
Balance Sheet
Total Assets78.31M90.11M99.94M109.93M88.85M
Cash, Cash Equivalents and Short-Term Investments428.40K844.50K689.10K361.20K1.81M
Total Debt32.40M35.55M45.53M42.68M16.23M
Total Liabilities37.75M44.65M54.70M63.17M48.59M
Stockholders Equity40.57M45.45M45.23M46.77M40.26M
Cash Flow
Free Cash Flow2.77M7.93M-1.52M-24.86M3.67M
Operating Cash Flow3.21M8.75M58.50K-21.14M7.82M
Investing Cash Flow-429.60K4.04M-1.76M-3.94M-4.15M
Financing Cash Flow-3.08M-12.20M2.03M23.63M-4.86M

Educational Development Technical Analysis

Technical Analysis Sentiment
Positive
Last Price1.35
Price Trends
50DMA
1.33
Positive
100DMA
1.30
Positive
200DMA
1.55
Negative
Market Momentum
MACD
>-0.01
Negative
RSI
54.26
Neutral
STOCH
75.18
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EDUC, the sentiment is Positive. The current price of 1.35 is above the 20-day moving average (MA) of 1.32, above the 50-day MA of 1.33, and below the 200-day MA of 1.55, indicating a neutral trend. The MACD of >-0.01 indicates Negative momentum. The RSI at 54.26 is Neutral, neither overbought nor oversold. The STOCH value of 75.18 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for EDUC.

Educational Development Peers Comparison

Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
62
Neutral
$41.97B-1.66-12.07%3.33%2.07%-69.32%
58
Neutral
$84.68M-48.12%4.11%78.58%
56
Neutral
$66.24M-16.65%105.31%95.66%
49
Neutral
$11.57M-12.07%-32.68%-3656.21%
48
Neutral
$81.97M154.70%-3.41%-18.54%
45
Neutral
$52.71M-123.16%-15.07%33.40%
42
Neutral
$36.90M-55.07%1.15%71.71%
* Communication Services Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
EDUC
Educational Development
1.35
-0.90
-40.00%
FLNT
Fluent
2.55
-0.94
-26.93%
TOON
Kartoon Studios
0.77
-0.17
-18.09%
LVO
LiveOne
0.71
-0.93
-56.71%
CCG
Cheche Group
0.82
-0.07
-7.87%
MNY
MoneyHero Limited
1.96
0.38
24.05%

Educational Development Corporate Events

Executive/Board ChangesShareholder Meetings
Educational Development Elects New Director at Annual Meeting
Neutral
Jul 8, 2025

At the annual meeting of stockholders held on July 2, 2025, Educational Development Company elected Dr. Amy N. Emerson as a Class III Director for a three-year term. Additionally, the stockholders ratified the appointment of HoganTaylor LLP as the independent registered public accounting firm for the year ending February 28, 2026.

Business Operations and StrategyFinancial Disclosures
Educational Development Reports Decline in Q1 Revenues
Negative
Jul 7, 2025

On July 7, 2025, Educational Development Corporation reported its fiscal 2026 first quarter financial results, showing a decline in net revenues to $7.1 million from $10.0 million the previous year. The company executed several product discount promotions to increase cash flow, which impacted gross margins. Despite lower sales, EDC reduced its losses compared to the previous year and is focused on turning excess inventory into cash to strengthen its financial position. The company is also in the process of selling the Hilti Complex, which is expected to retire outstanding debt and provide financial flexibility for future growth.

Business Operations and Strategy
Educational Development Amends Real Estate Contract
Neutral
Jun 30, 2025

On June 26, 2025, Educational Development Corporation executed an amendment to its commercial real estate contract with TG OTC, LLC for the sale of its headquarters and distribution warehouse in Tulsa, Oklahoma. The amendment extends the due diligence period to September 11, 2025, and changes the expected closing date to ten days after the due diligence period, potentially impacting the company’s operational logistics and financial planning.

Financial Disclosures
Educational Development Schedules Q1 2026 Earnings Call
Neutral
Jun 9, 2025

On June 9, 2025, Educational Development Corporation announced that it will hold its fiscal year 2026 first quarter earnings call on July 7, 2025. The call will include a presentation of the company’s first quarter results by key executives and a live Q&A session, indicating the company’s commitment to transparency and stakeholder engagement.

Executive/Board ChangesBusiness Operations and StrategyFinancial Disclosures
Educational Development Reports Fiscal 2025 Financial Results
Negative
May 19, 2025

On May 14, 2025, Educational Development Corporation’s Board of Directors approved the addition of Steven Hooser to its Board, transitioning him from his role as the company’s Investor Relations advisor. The company also appointed Dr. Amy Emerson as a Class III Director. On May 19, 2025, EDC reported its fiscal 2025 financial results, highlighting a significant reduction in net revenues and an overall net loss compared to the previous year. Despite these challenges, EDC focused on reducing debt and inventory, generating cash flow to improve its financial position. The company also executed a Purchase Sale Agreement for its headquarters, aiming to eliminate bank debts and enhance operational liquidity.

Financial Disclosures
Educational Development Reschedules 2025 Earnings Call
Neutral
May 5, 2025

On May 5, 2025, Educational Development Corporation announced a change in the date for its fiscal year 2025 earnings call, which will now take place on May 19, 2025. The call will feature presentations from key executives and a live Q&A session, providing insights into the company’s year-end results and future outlook.

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.Date of analysis: Jul 24, 2025