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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:42Neutral
Price Target:
$1.00
▼(-9.09% Downside)
Educational Development Corporation's overall stock score is primarily impacted by its weak financial performance and bearish technical indicators. The company's ongoing revenue decline and negative profitability are significant concerns, reflected in a low valuation score. Corporate events indicate attempts to improve financial flexibility, but the negative sentiment persists. The absence of positive earnings call data further limits the score.

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 MoneyEDUC generates revenue through multiple streams, primarily by selling educational materials directly to schools, teachers, and parents. The company may also offer subscription-based access to digital learning platforms and resources, providing ongoing value to its users. Additionally, EDUC could partner with educational institutions and organizations to develop customized curriculum solutions, earning revenue through contractual agreements. Key partnerships with educational publishers and technology providers may further enhance its product offerings and revenue potential. Overall, EDUC's earnings are bolstered by its commitment to quality education and its ability to adapt to the evolving needs of the education sector.

Educational Development Earnings Call Summary

Earnings Call Date:Jul 07, 2025
(Q4-2025)
|
% Change Since: |
Next Earnings Date:Oct 09, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a challenging fiscal quarter and year with significant revenue decline and partner reduction. However, new initiatives like 'The Pass' and successful promotions, along with the progress in selling the Hilti complex, provide some positive outlooks. The company's strategic decisions to reduce debt and expenses show resilience, but the overall financial performance remains under pressure.
Q4-2025 Updates
Positive Updates
Successful Launch of 'The Pass' Shipping Subscription
The Pass offers members discounted or free shipping and special promotions, driving customer loyalty and engagement. Early adoption has been successful, creating new opportunities for brand partners.
Book Friday Promotion Success
The Book Friday event led to increased customer activity, allowed movement of excess inventory, generated cash flow, and created community energy.
Hilti Complex Building Sale Agreement
A purchase sale agreement for the Hilti Complex was executed with a new buyer, expected to fully pay off bank debts and leave the company with no debt.
Reduction in Loss Before Taxes
Loss before taxes declined from $2.2 million in the previous year to $1.5 million, reflecting a focus on reducing expenses.
Decrease in Net Inventories
Net inventories decreased by $10.9 million from $55.6 million to $44.7 million, aiding in better cash flow management.
Negative Updates
Significant Decrease in Net Revenues
Net revenues for the fourth quarter were $6.6 million, down from $9 million in the prior year. Year-to-date net revenues fell to $34.2 million from $51 million.
Decline in PaperPie Brand Partners
Average active PaperPie Brand Partners dropped to 9,400 from 15,500 in the fourth quarter. Year-to-date figures also decreased to 12,300 from 18,300.
Net Loss and Loss Per Share Increase
The net loss for the fiscal year was $5.3 million compared to a profit of $500,000 the prior year. Loss per share increased to $0.63 from earnings of $0.07.
Gross Margin Impacted by Discounts
Increased customer discounts to boost sales and reduce inventory negatively impacted gross margins and bottom line.
Company Guidance
During the conference call discussing the Educational Development Corporation's fiscal fourth quarter and fiscal 2025 results, several key metrics were highlighted. The company reported a decrease in net revenues to $6.6 million for the fourth quarter, compared to $9 million in the prior year. The average active PaperPie Brand Partners declined to 9,400 from 15,500. Despite a reduction in sales, the loss before taxes improved to $1.5 million from $2.2 million the previous year. For the full fiscal year 2025, net revenues totaled $34.2 million, down from $51 million, with a net loss of $5.3 million in stark contrast to the previous year's income of $500,000. The company focused on strategic discounting to bolster sales, impacting the gross margin, and aimed to reduce excess inventory to pay down bank debt. Additionally, a sale leaseback agreement for the Hilti Complex was announced, expected to eliminate debt and improve financial flexibility, while retaining ownership of 17 acres of excess land. The call also discussed the company's initiatives to re-engage brand partners and customers through promotions such as Book Friday and the introduction of a new shipping subscription program, The Pass.

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.
BreakdownTTMDec 2025Dec 2024Dec 2023Dec 2022Dec 2021
Income Statement
Total Revenue31.30M34.19M51.03M87.83M142.23M204.64M
Gross Profit18.71M21.03M32.98M56.07M97.93M144.60M
EBITDA-2.84M-2.94M5.98M1.22M14.28M19.43M
Net Income-5.06M-5.26M546.40K-2.50M8.31M12.62M
Balance Sheet
Total Assets76.33M78.31M90.11M99.94M109.93M88.85M
Cash, Cash Equivalents and Short-Term Investments1.04M428.40K844.50K689.10K361.20K1.81M
Total Debt31.37M32.40M35.55M45.53M42.68M16.23M
Total Liabilities36.82M37.75M44.65M54.70M63.17M48.59M
Stockholders Equity39.51M40.57M45.45M45.23M46.77M40.26M
Cash Flow
Free Cash Flow2.87M2.77M7.93M-1.52M-24.86M3.67M
Operating Cash Flow3.41M3.21M8.75M58.50K-21.14M7.82M
Investing Cash Flow-483.80K-429.60K4.04M-1.76M-3.94M-4.15M
Financing Cash Flow-3.19M-3.08M-12.20M2.03M23.63M-4.86M

Educational Development Technical Analysis

Technical Analysis Sentiment
Negative
Last Price1.10
Price Trends
50DMA
1.24
Negative
100DMA
1.27
Negative
200DMA
1.42
Negative
Market Momentum
MACD
-0.04
Negative
RSI
41.14
Neutral
STOCH
41.61
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EDUC, the sentiment is Negative. The current price of 1.1 is below the 20-day moving average (MA) of 1.11, below the 50-day MA of 1.24, and below the 200-day MA of 1.42, indicating a bearish trend. The MACD of -0.04 indicates Negative momentum. The RSI at 41.14 is Neutral, neither overbought nor oversold. The STOCH value of 41.61 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for EDUC.

Educational Development Peers Comparison

Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
66
Neutral
$621.99M37.85-0.19%3.07%2.25%-103.50%
62
Neutral
$79.54M2.66-24.74%3.60%-8.00%-46.22%
60
Neutral
$46.29B4.07-13.11%4.12%1.85%-42.71%
60
Neutral
$602.60M6.6147.54%-8.00%
47
Neutral
$24.43M0.00%-5.68%-127.26%
42
Neutral
$9.53M-12.07%-32.68%-3656.21%
* Communication Services Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
EDUC
Educational Development
1.10
-0.92
-45.54%
DALN
DallasNews
14.85
10.49
240.60%
LEE
Lee Enterprises
4.09
-3.59
-46.74%
SCHL
Scholastic
26.06
-3.87
-12.93%
GCI
Gannett
4.29
-0.28
-6.13%

Educational Development Corporate Events

Private Placements and FinancingBusiness Operations and Strategy
Educational Development Extends Credit Agreement Maturity Date
Neutral
Aug 12, 2025

On August 12, 2025, Educational Development Corporation announced the execution of the Ninth Amendment to its Existing Credit Agreement with BOKF, NA, extending the maturity date of the Revolving Loan to September 19, 2025. This extension aligns with the maturity dates of the company’s term loans related to its real estate, reflecting ongoing efforts to manage its credit agreements and explore financing solutions, including potential sales or refinancing of assets like the Hilti Complex.

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.

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: Aug 12, 2025