McGraw Hill, Inc. (MH)
NYSE:MH
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McGraw Hill, Inc.
(NYSE:MH)
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Rating:55Neutral
Price Target:
$12.00
▼(-14.89% Downside)
Action:ReiteratedDate:02/12/26
The score is held back mainly by balance-sheet leverage and weak profitability/cash-flow consistency, alongside bearish technical trends. Offsetting this, the latest earnings call was constructive with raised guidance, recurring/digital growth, margin expansion, and ongoing deleveraging.
Positive Factors
Recurring revenue mix
An 82% recurring mix with 14.8% YoY growth materially improves revenue predictability and retention. That scale supports land-and-expand dynamics in higher ed and K‑12 platforms, smoothing cash flow and lowering reliance on one-off adoptions over the next several quarters.
Negative Factors
High leverage
Very high leverage increases interest and refinancing risk and constrains strategic optionality. Even with active paydowns, remaining leverage above target limits free cash deployment and raises vulnerability to macro shocks or slower revenue conversion in the coming 2–6 months.
Read all positive and negative factors
Positive Factors
Negative Factors
Recurring revenue mix
An 82% recurring mix with 14.8% YoY growth materially improves revenue predictability and retention. That scale supports land-and-expand dynamics in higher ed and K‑12 platforms, smoothing cash flow and lowering reliance on one-off adoptions over the next several quarters.
Read all positive factors
McGraw Hill, Inc. (MH) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.25B
Dividend YieldN/A
Average Volume (3M)341.02K
Price to Earnings (P/E)―
Beta (1Y)0.02
Revenue Growth3.17%
EPS Growth4.85%
CountryUS
Employees4,200
SectorConsumer Defensive
Sector Strength42
IndustryEducation & Training Services
Share Statistics
EPS (TTM)-0.38
Shares Outstanding191,001,530
10 Day Avg. Volume261,039
30 Day Avg. Volume341,019
Financial Highlights & Ratios
PEG Ratio0.68
Price to Book (P/B)11.59
Price to Sales (P/S)1.55
P/FCF Ratio6.69
Enterprise Value/Market Cap1.97
Enterprise Value/Revenue2.10
Enterprise Value/Gross Profit2.59
Enterprise Value/Ebitda6.47
Forecast
1Y Price Target
$19.75Price Target Upside40.07% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering9
EPS Forecast (FY)1.75
Revenue Forecast (FY)$2.17B
McGraw Hill, Inc. Business Overview & Revenue Model
Company Description
McGraw Hill, Inc., doing business as McGraw Hill, provides information solutions for K-12, higher education, and professional markets in the United States and internationally. It operates through K-12, Higher Education, Global Professional, and In...
How the Company Makes Money
McGraw Hill primarily makes money by selling educational content and learning solutions to institutions (such as schools, school districts, colleges, and universities), educators, students, and professionals. Key revenue streams include: (1) Digit...
McGraw Hill, Inc. Earnings Call Summary
Earnings Call Date:Feb 11, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Jun 11, 2026
Earnings Call Sentiment Positive
The call emphasized strong execution: higher education outperformance (24% growth), sizable increases in recurring and digital revenue (recurring +14.8%, digital +11%), margin expansion (~100 bps gross margin and adjusted EBITDA margin expansion), robust operating cash flow (+12%) and aggressive debt paydown with raised full-year guidance. Notable challenges include a meaningful K-12 revenue decline (-14.6%), modest international softness (-1.8%), and near-term comparability headwinds for Q4; AI efficiency and some operational initiatives are early in realization. On balance, positive financial momentum, product traction (AI and platform adoption), and capital allocation discipline outweigh the headwinds.Positive Updates
Quarterly Revenue Growth
Total revenue for fiscal Q3 reached $434 million, up 4.2% year-over-year, with fiscal year-to-date revenue up 0.7% versus prior year.
Negative Updates
K-12 Revenue Decline
K-12 revenue declined 14.6% year-over-year to $128 million in Q3, reflecting a smaller market this year and lapping stronger prior-year capture rates despite improvements in recurring revenue (only down 1.6%).
Read all updates
Q3-2026 Updates
Positive
Negative
Quarterly Revenue Growth
Total revenue for fiscal Q3 reached $434 million, up 4.2% year-over-year, with fiscal year-to-date revenue up 0.7% versus prior year.
Read all positive updates
Company Guidance
McGraw Hill raised its fiscal 2026 guidance to total revenue of $2.067–$2.087 billion, recurring revenue of $1.516–$1.526 billion and adjusted EBITDA of $729–$739 million; management expects unlevered free cash flow to slightly exceed the low end of a 50%–100% adjusted‑EBITDA conversion range and keeps CapEx plus product development at 8%–9% of revenue. For Q4 modeling they expect stock‑based compensation of $1–$2 million and tax expense to be breakeven. The company reiterated a net‑leverage target of 2.0–2.5x (net leverage was 2.9x at 12/31), noted $1.7 billion of remaining performance obligations, and ended the quarter with $514 million cash and $964 million total liquidity (undrawn revolver).McGraw Hill, Inc. Financial Statement Overview
Summary
Income Statement
65
Positive
Balance Sheet
40
Negative
Cash Flow
55
Neutral
| Breakdown | TTM | Mar 2025 | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.11B | 2.10B | 1.96B | 1.95B | 1.79B | 1.54B |
| Gross Profit | 1.71B | 1.68B | 1.54B | 1.48B | 1.37B | 1.21B |
| EBITDA | 683.94M | 669.16M | 571.18M | 495.71M | 335.69M | 363.74M |
| Net Income | -71.28M | -85.84M | -193.02M | -404.10M | -674.25M | 44.75M |
Balance Sheet | ||||||
| Total Assets | 5.64B | 5.76B | 5.81B | 6.07B | 6.59B | 2.33B |
| Cash, Cash Equivalents and Short-Term Investments | 514.39M | 389.83M | 203.62M | 181.47M | 296.37M | 354.32M |
| Total Debt | 2.69B | 3.26B | 3.53B | 3.59B | 3.70B | 2.24B |
| Total Liabilities | 4.87B | 5.48B | 5.44B | 5.51B | 5.64B | 3.83B |
| Stockholders Equity | 775.34M | 280.24M | 368.75M | 558.13M | 948.95M | -1.51B |
Cash Flow | ||||||
| Free Cash Flow | 317.11M | 485.22M | 79.55M | 116.06M | 175.04M | 287.39M |
| Operating Cash Flow | 436.11M | 646.28M | 236.16M | 256.62M | 205.69M | 395.38M |
| Investing Cash Flow | -201.68M | -167.06M | -136.11M | -162.32M | -5.32B | -113.19M |
| Financing Cash Flow | -270.44M | -294.68M | -77.24M | -204.57M | 5.06B | -111.64M |
McGraw Hill, Inc. Peers Comparison
UnderperformOutperform
Sector (62)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $8.77B | 16.99 | 10.79% | 1.03% | 12.38% | 11.05% | |
72 Outperform | $4.44B | 15.09 | 28.22% | ― | 7.43% | 0.49% | |
70 Outperform | $6.76B | 3.76 | 14.93% | ― | 34.00% | 578.17% | |
64 Neutral | $1.04B | -11.97 | -10.06% | ― | 9.79% | 8.61% | |
62 Neutral | $20.33B | 14.63 | -3.31% | 3.23% | 1.93% | -12.26% | |
60 Neutral | $719.46M | 227.74 | 1.74% | ― | 0.42% | ― | |
55 Neutral | $2.25B | -37.50 | -13.36% | ― | 3.17% | 4.85% |
* Consumer Defensive Sector Average
MH
McGraw Hill, Inc.
11.77
-5.04
-29.98%
LOPE
Grand Canyon Education
163.41
-22.67
-12.18%
EDU
New Oriental Education Tech
53.82
4.45
9.02%
TAL
TAL Education Group
11.17
2.12
23.43%
COUR
Coursera
6.15
-2.45
-28.49%
UDMY
Udemy Inc
4.93
-1.38
-21.87%
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.