McGraw Hill, Inc. (MH) AI Stock Analysis

• Market Cap: $2.67B
• Dividend Yield: N/A
• Average Volume (3M): 852.21K
• Price to Earnings (P/E): ―
• Beta (1Y): -0.63
• Revenue Growth: 3.19%
• EPS Growth: -6.25%
• Country: US
• Employees: 4,200
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Education & Training Services
• EPS (TTM): 0.28
• Shares Outstanding: 191,001,530
• 10 Day Avg. Volume: 531,689
• 30 Day Avg. Volume: 852,213
• PEG Ratio: 0.68
• Price to Book (P/B): 11.59
• Price to Sales (P/S): 1.55
• P/FCF Ratio: 6.69
• Enterprise Value/Market Cap: 1.81
• Enterprise Value/Revenue: 2.30
• Enterprise Value/Gross Profit: 2.84
• Enterprise Value/Ebitda: 7.10
• 1Y Price Target: $20.00
• Price Target Upside: 42.86% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 10
• EPS Forecast (FY): 1.81
• Revenue Forecast (FY): $2.08B

• Rating: 55 Neutral
• Price Target: $13.00 ▼(-7.14% Downside)
• Action: Reiterated Date: 02/12/26
• Date: Action: Reiterated 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 & digital revenue mix

A very high recurring and digital mix (82% of revenue) and double-digit recurring growth materially improve revenue predictability and retention. This supports repeatable cash flows, easier multi-year customer contracts, and land-and-expand economics that reduce cyclicality over the next 2–6 months and beyond.

Margin expansion and strong adjusted EBITDA

Sustained margin expansion and a high adjusted-EBITDA margin indicate operational leverage from digital offerings. Robust gross and EBITDA margins provide durable capacity to fund product development, AI investments, and debt paydowns while preserving cash generation even if top-line growth moderates.

Improving cash flow and active deleveraging

Improving operating cash flow, large cash balance and meaningful term‑loan prepayments reflect disciplined capital allocation. Continued debt paydowns and ample revolver headroom enhance financial flexibility and reduce interest expense, supporting investment in digital products while moving toward leverage targets.

Negative Factors

High leverage and balance sheet risk

Very high leverage and a net leverage ratio above the target range constrain strategic optionality and increase refinancing and interest-rate exposure. If revenue or FCF underperforms, elevated leverage raises default and covenant risks and limits the ability to pursue M&A or accelerate investment.

Negative net profitability and volatile FCF

A negative net margin and sharply declining free cash flow growth signal that earnings quality and cash conversion remain uneven. This undermines sustainable internal funding for growth and deleveraging, increasing reliance on continued margin gains or external financing to meet long-term targets.

K-12 weakness and market concentration

A significant K‑12 decline and modest international softness expose the business to adoption-cycle volatility and market concentration. Reliance on higher-ed and select geographies heightens execution risk if districts or markets delay purchases or if competitive pressures intensify.

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 International segments. The K-12 segment provides core, supplemental, and intervention curricula to support the needs of the K-12 schools. It sells blended digital and print learning solutions directly to school districts across the United States. The Higher Education segment offers students, instructors, and institutions with adaptive digital learning solutions and content, and instructional materials. Its solutions are used by students enrolled in non-profit colleges and universities, as well as for-profit institutions. This segment sells its higher education solutions to online retailers and distribution partners, as well as sells directly to student through its proprietary e-commerce platform. The Global Professional segment provides students, institutions, and professionals with comprehensive medical and engineering learning solutions. This segment sells digital learning solutions and print materials accessible through a range of mediums for learners and customers. The International segment offers digital and print solutions in approximately 100 countries and 80 languages outside of the United States. This segment, through its distribution network, serve the needs of learners and educators with K-12 and higher education solutions. McGraw Hill, Inc. was formerly known as Mav Holding Corporation and changed its name to McGraw Hill, Inc. in October 2022. The company was founded in 1888 and is headquartered in Columbus, Ohio.

How the Company Makes Money

McGraw Hill generates revenue primarily through the sale of educational materials and services across its various sectors. Key revenue streams include the sale of print and digital textbooks, subscription services for digital learning platforms, and licensing fees for educational content. Additionally, the company earns money from assessment products and services, including standardized testing solutions. McGraw Hill also engages in strategic partnerships with educational institutions and technology providers, which can enhance its product offerings and expand its market reach, contributing further to its earnings. The ongoing transition towards digital learning solutions and the increasing demand for educational technology also play a significant role in driving the company's revenue growth.

McGraw Hill, Inc. Financial Statement Overview

Summary

Income statement shows very strong revenue growth (401.14%) and healthy EBIT/EBITDA margins (14.60%/31.85%), but profitability is weak with a negative net margin (-4.09%). Balance sheet risk is elevated due to very high leverage (debt-to-equity 11.62) and negative ROE (-30.63%). Cash flow is mixed: operating cash flow improved, but free cash flow growth is sharply negative (-442.06%).

Income Statement

McGraw Hill, Inc. has shown significant revenue growth of 401.14% in the latest year, indicating strong top-line expansion. However, the company is struggling with profitability, as evidenced by a negative net profit margin of -4.09%. The EBIT and EBITDA margins are relatively healthy at 14.60% and 31.85%, respectively, suggesting operational efficiency despite net losses.

Balance Sheet

The company has a high debt-to-equity ratio of 11.62, indicating significant leverage and potential financial risk. The negative return on equity of -30.63% reflects ongoing challenges in generating returns for shareholders. The equity ratio is low, suggesting limited equity financing relative to total assets.

Cash Flow

Operating cash flow has improved, with a coverage ratio of 0.49, indicating better cash generation relative to net income. However, free cash flow growth is negative at -442.06%, highlighting potential cash flow challenges. The free cash flow to net income ratio is 0.75, showing some ability to convert earnings into cash.

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

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
EDU	78 Outperform	$9.14B	23.02	10.05%	1.03%	7.22%	-2.84%
LOPE	73 Outperform	$4.32B	20.61	28.24%	―	7.05%	-2.63%
TAL	70 Outperform	$6.38B	21.63	7.68%	―	44.37%	146.96%
COUR	64 Neutral	$1.08B	-20.74	-8.27%	―	8.10%	43.35%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%
UDMY	60 Neutral	$731.47M	205.31	1.87%	―	2.53%	95.79%
MH	55 Neutral	$2.67B	-37.55	―	―	3.19%	-6.25%

McGraw Hill, Inc. Corporate Events

McGraw Hill Appoints Brian Van Dam Chief Accounting Officer

On January 5, 2026, McGraw Hill, Inc. created and filled a new executive role by appointing Brian Van Dam as its Chief Accounting Officer and principal accounting officer, signaling an enhancement of its senior finance leadership structure. Van Dam, a 52-year-old accounting executive with prior controller and senior finance roles at Array Corporation, Transfix, Inc., and Xerox Corporation, will receive a $350,000 annual base salary, a target bonus opportunity of 45% of base pay under the company’s incentive plan, a $20,000 sign-on bonus subject to clawback under certain conditions, and potential future equity-based awards, while the existing Senior Vice President, Controller, Muhammad Ali Jamal, will remain in his role but no longer serve as principal accounting officer, reflecting a reallocation of responsibilities within McGraw Hill’s finance organization without any disclosed related-party or conflict-of-interest concerns.

The most recent analyst rating on (MH) stock is a Buy with a $19.00 price target. To see the full list of analyst forecasts on McGraw Hill, Inc. stock, see the MH Stock Forecast page.

McGraw Hill Names Philip Moyer as New CEO

On January 6, 2026, McGraw Hill announced that Simon Allen will retire as president and CEO effective February 9, 2026, after leading the company since October 2019, but will remain chair of the board and continue to support strategy and governance. The board has appointed former Vimeo CEO and Google Cloud AI executive Philip Moyer as Allen’s successor and as a director effective the same date, and expanded the board from nine to 11 members, adding Moyer and Platinum Equity managing director Eric Worley as Class II and Class I directors, respectively. Allen’s transition package includes continued eligibility for a full fiscal 2026 annual bonus, a quarterly cash transition supplement through up to December 31, 2028, continued tax services for a limited period, and standard non-employee director compensation while serving as chair, underscoring an orderly, non-contentious succession. Moyer’s employment agreement provides a $1.2 million base salary, a $1.8 million target annual bonus, a $2.5 million sign-on bonus, an $8 million initial equity award split between time- and performance-vested RSUs tied to ambitious share-price hurdles, matching RSUs linked to his own share purchases, and enhanced severance protections, aligning his incentives with long-term shareholder value and stock performance. The appointment of a technology- and AI-focused leader follows a period in which Allen shifted McGraw Hill’s revenue mix to nearly two-thirds digital and roughly 60% recurring, and signals an intention to accelerate AI-driven, personalized learning offerings while maintaining continuity at the board level and strengthening Platinum Equity’s representation through Worley’s addition.

The most recent analyst rating on (MH) stock is a Buy with a $22.00 price target. To see the full list of analyst forecasts on McGraw Hill, Inc. stock, see the MH Stock Forecast page.

McGraw Hill Announces $50 Million Loan Prepayment

On December 10, 2025, McGraw Hill, Inc. announced a $50 million prepayment on its term loan, further strengthening its balance sheet. This move is part of a broader strategy to reduce gross debt, with $592 million paid year-to-date, and aligns with the company’s commitment to maintaining a 2-2.5x net leverage target while continuing strategic investments for future growth.

The most recent analyst rating on (MH) stock is a Hold with a $17.50 price target. To see the full list of analyst forecasts on McGraw Hill, Inc. stock, see the MH Stock Forecast page.