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Franklin Covey Company
(NYSE:FC)
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Rating:57Neutral
Price Target:
$21.50
▼(-8.82% Downside)
Action:Reiterated
Date:07/10/26
The score is held back primarily by compressed TTM profitability versus prior years and weak technical momentum (below key moving averages with negative MACD). Positives include a debt-free balance sheet and solid absolute cash generation, plus an earnings call that emphasized improving profitability and strong leading indicators (deferred revenue, subscriptions, and services bookings). Valuation is a major risk factor given the very high P/E and no dividend support.
Positive Factors
Deferred revenue build and rising subscription invoiced
A growing deferred revenue base and rising subscription/committed invoiced amounts provide multi-quarter visibility into future recognized revenue. This durable runway reduces near-term revenue volatility, supports predictable capacity planning for delivery teams, and underpins sustainable top-line compounding over the medium term.
Negative Factors
Compressed profitability versus prior years
A sharp step-down in margin conversion signals the company is currently less effective at turning strong gross profit into operating earnings. If structural cost pressures or mix shifts persist, lower profitability can meaningfully reduce return on invested capital, constrain reinvestment, and limit ability to sustainably expand margins.
Read all positive and negative factors
Positive Factors
Negative Factors
Deferred revenue build and rising subscription invoiced
A growing deferred revenue base and rising subscription/committed invoiced amounts provide multi-quarter visibility into future recognized revenue. This durable runway reduces near-term revenue volatility, supports predictable capacity planning for delivery teams, and underpins sustainable top-line compounding over the medium term.
Read all positive factors
Franklin Covey Company (FC) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$233.90M
Dividend YieldN/A
Average Volume (3M)114.39K
Price to Earnings (P/E)115.9
Beta (1Y)1.43
Revenue Growth-6.14%
EPS Growth-78.29%
CountryUS
Employees1,084
SectorConsumer Defensive
Sector Strength42
IndustryConsulting Services
Share Statistics
EPS (TTM)0.18
Shares Outstanding11,293,873
10 Day Avg. Volume189,769
30 Day Avg. Volume114,390
Financial Highlights & Ratios
PEG Ratio-0.94
Price to Book (P/B)3.78
Price to Sales (P/S)0.95
P/FCF Ratio20.92
Enterprise Value/Market Cap1.07
Enterprise Value/Revenue0.96
Enterprise Value/Gross Profit1.31
Enterprise Value/Ebitda16.94
Forecast
1Y Price Target
$31.00Price Target Upside31.47% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
EPS Forecast (FY)0.41
Revenue Forecast (FY)$267.75M
Franklin Covey Company Business Overview & Revenue Model
Company Description
Franklin Covey Co. provides specialized training and advisory services across the globe, assisting both businesses and individuals. The company's expertise lies in critical areas like operational efficiency, improving sales results, enhancing over...
How the Company Makes Money
Franklin Covey primarily makes money by selling learning and development solutions that combine proprietary content with delivery and advisory services. Its key revenue streams include: (1) Subscription and license revenue: recurring fees from org...
Franklin Covey Company Earnings Call Summary
Earnings Call Date:Jul 01, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Nov 11, 2026
Earnings Call Sentiment Positive
The call communicated clear underlying momentum in recurring subscription and services bookings (subscription/committed invoiced +17%, services bookings +25% YTD, deferred revenue +7% company / +18% NA billed), improved adjusted EBITDA and net income, and maintained EBITDA guidance despite a modest revenue guidance reduction driven by timing and geopolitical items. Key short-term challenges include China and international headwinds, a delayed statewide education funding (~$2M immediate impact, larger FY effect), a YoY gross margin decline, and negative free cash flow in the quarter. Management emphasized operational resilience, go-to-market transformation payoff in Enterprise North America, and positioning for accelerated growth in fiscal 2027. Overall, the positives around bookings, deferred revenue runway, profitability improvements, and liquidity outweigh the transitory challenges discussed.Positive Updates
Maintained Adjusted EBITDA Guidance Despite Revenue Revision
Company revised fiscal 2026 revenue guidance down to $260M–$267M due to timing and geopolitical shifts but maintained prior adjusted EBITDA guidance of $28M–$31M, signaling cost discipline and margin management.
Negative Updates
Revenue Guidance Reduced Due to Timing and Geopolitics
Revenue guidance cut to $260M–$267M primarily from a $2M timing shift of a contracted enterprise services delivery, a ~$2M education statewide funding delay, and roughly $2M headwind from a challenging international environment.
Read all updates
Q3-2026 Updates
Positive
Negative
Maintained Adjusted EBITDA Guidance Despite Revenue Revision
Company revised fiscal 2026 revenue guidance down to $260M–$267M due to timing and geopolitical shifts but maintained prior adjusted EBITDA guidance of $28M–$31M, signaling cost discipline and margin management.
Read all positive updates
Company Guidance
Management revised fiscal 2026 revenue guidance to $260–$267 million while maintaining adjusted EBITDA guidance at $28–$31 million (in a narrower range), citing a ~$2M timing shift of previously invoiced Enterprise North America services, up to $2M of delayed statewide education funding and roughly $2M of international/geopolitical headwinds. They pointed to supporting momentum: consolidated deferred revenue up 7% YoY to $96M, Enterprise North America billed deferred revenue up 18% to $58M, consolidated subscription and contractually committed invoiced amounts up 17% in Q3 to $37M, services booking pace up >25% YTD and materially more services already contracted for fiscal 2027. Quarter highlights included Q3 reported revenue $67.8M (+1% YoY), Q3 adjusted EBITDA $8.3M (+14% YoY), gross margin 73.9% (vs. 76.5% prior year), enterprise = 71% of revenue, education = $19M (+2%) with education subscription revenue +11% in Q3 (+14% YTD), liquidity >$74M (including $12M cash and a $62.5M credit facility), ~1.6M shares repurchased for $28.1M YTD ($50M authorization; $20M remaining), operating cash flow YTD $17.5M (‑8%) and Q3 free cash flow of ‑$1M.Franklin Covey Company Financial Statement Overview
Summary
Income Statement
55
Neutral
Balance Sheet
72
Positive
Cash Flow
63
Positive
| Breakdown | TTM | Aug 2025 | Aug 2024 | Aug 2023 | Aug 2022 | Aug 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 262.75M | 267.07M | 287.23M | 280.52M | 262.84M | 224.17M |
| Gross Profit | 192.14M | 203.57M | 221.07M | 213.49M | 201.91M | 172.90M |
| EBITDA | 14.83M | 14.43M | 46.25M | 39.98M | 38.17M | 23.82M |
| Net Income | 2.19M | 3.07M | 23.40M | 17.78M | 18.43M | 13.62M |
Balance Sheet | ||||||
| Total Assets | 198.01M | 242.91M | 261.54M | 245.92M | 259.15M | 249.65M |
| Cash, Cash Equivalents and Short-Term Investments | 11.97M | 31.70M | 48.66M | 38.23M | 60.52M | 47.42M |
| Total Debt | 0.00 | 7.82M | 6.03M | 15.33M | 24.26M | 32.86M |
| Total Liabilities | 155.07M | 176.00M | 178.40M | 167.26M | 176.34M | 169.79M |
| Stockholders Equity | 42.94M | 66.91M | 83.14M | 78.65M | 82.81M | 79.86M |
Cash Flow | ||||||
| Free Cash Flow | 17.23M | 12.09M | 56.56M | 22.19M | 46.92M | 42.07M |
| Operating Cash Flow | 27.41M | 28.98M | 60.26M | 35.74M | 52.25M | 46.18M |
| Investing Cash Flow | -17.42M | -16.89M | -11.31M | -13.55M | -5.33M | -14.31M |
| Financing Cash Flow | -41.90M | -28.78M | -38.66M | -44.18M | -32.67M | -11.48M |
Franklin Covey Company Technical Analysis
Negative
23.58
Price Trends
22.88
Negative
19.86
Positive
18.79
Positive
Market Momentum
-0.55
Positive
41.45
Neutral
16.68
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FC, the sentiment is Negative. The current price of 23.58 is above the 20-day moving average (MA) of 23.24, above the 50-day MA of 22.88, and above the 200-day MA of 18.79, indicating a neutral trend. The MACD of -0.55 indicates Positive momentum. The RSI at 41.45 is Neutral, neither overbought nor oversold. The STOCH value of 16.68 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FC.
Franklin Covey Company Risk Analysis
Franklin Covey Company disclosed 29 risk factors in its most recent earnings report. Franklin Covey Company reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Franklin Covey Company Peers Comparison
UnderperformOutperform
Sector (62)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
67 Neutral | $1.38B | 16.50 | 8.35% | 0.65% | -9.45% | -20.88% | |
62 Neutral | $20.33B | 14.63 | -3.31% | 3.23% | 1.93% | -12.26% | |
61 Neutral | $1.66B | 17.57 | 21.83% | ― | 11.79% | -13.03% | |
60 Neutral | $1.01B | 22.20 | 23.64% | 0.97% | 10.50% | -3.09% | |
57 Neutral | $233.90M | 115.94 | -4.11% | ― | -6.14% | -78.29% | |
50 Neutral | $161.00M | -1.62 | -49.24% | 6.74% | -13.38% | 9.50% | |
48 Neutral | $188.10M | -3.51 | -39.22% | ― | -7.06% | 38.03% |
* Consumer Defensive Sector Average
FC
Franklin Covey Company
20.97
1.10
5.54%
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ICFI
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76.83
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Franklin Covey Company Corporate Events
Business Operations and StrategyFinancial Disclosures
Franklin Covey Reports Q3 Results, Lowers 2026 Guidance
Neutral
Jul 1, 2026
Franklin Covey Co. reported its fiscal third-quarter 2026 results, for the period ended May 31, 2026, with consolidated revenue edging up 1% year over year to $67.8 million, driven by growth in both the Enterprise and Education divisions and a 4% ...
Financial Disclosures
Franklin Covey Schedules Q3 2026 Results Conference Call
Neutral
Jun 17, 2026
Franklin Covey Co. announced it will hold a conference call to review its third-quarter 2026 financial results on Wednesday, July 1, 2026, at 5:00 p.m. ET, with results scheduled for release after the market close that same day. Investors and othe...
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.