Scholastic (SCHL) AI Stock Analysis

• Market Cap: $856.88M
• Dividend Yield: 2.78%
• Average Volume (3M): 384.35K
• Price to Earnings (P/E): 3.4
• Beta (1Y): 1.05
• Revenue Growth: 2.53%
• EPS Growth: -23.86%
• Country: US
• Employees: 4,770
• Sector: Communication Services
• Sector Strength: 97
• Industry: Publishing
• EPS (TTM): 2.57
• Shares Outstanding: 24,613,592
• 10 Day Avg. Volume: 386,002
• 30 Day Avg. Volume: 384,350
• PEG Ratio: 2.15
• Price to Book (P/B): 0.50
• Price to Sales (P/S): 0.29
• P/FCF Ratio: 6.63
• Enterprise Value/Market Cap: 1.30
• Enterprise Value/Revenue: 0.69
• Enterprise Value/Gross Profit: 1.32
• Enterprise Value/Ebitda: 10.12
• 1Y Price Target: $37.00
• Price Target Upside: 9.86% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 1
• EPS Forecast (FY): 0.9
• Revenue Forecast (FY): $1.62B

• Rating: 65 Neutral
• Price Target: $36.00 ▲(6.89% Upside)
• Action: Reiterated Date: 12/25/25
• Date: Action: Reiterated 12/25/25

The score is driven primarily by mixed financial performance: strong revenue growth and a stable balance sheet are offset by weak profitability and subpar cash conversion. Technicals are neutral with only mild trend support. Valuation is tempered by a negative P/E despite a reasonable dividend yield. The latest earnings call adds a positive tilt via affirmed guidance, improved EBITDA, and shareholder-return actions, but segment headwinds remain.

Positive Factors

Revenue Growth

Sustained top-line expansion (40.3% TTM) indicates strengthening market demand and scale across channels. Over 2-6 months this supports bargaining leverage with suppliers, higher backlist sales, and capacity to invest in content and distribution that reinforce long-term revenue resilience.

Healthy Gross Margin

A ~52% gross margin reflects favorable product economics for publishing and distribution, giving Scholastic headroom to absorb SG&A and invest in marketing and curriculum development. Durable gross margins underpin potential margin recovery if operating efficiencies improve.

Liquidity from Sale‑Leasebacks

Monetizing HQ and distribution real estate generated ~ $400M net proceeds and expanded buyback capacity, materially improving liquidity and capital allocation flexibility. This structural move reduces asset intensity and funds shareholder returns and strategic investments without relying on operating cash alone.

Negative Factors

Negative Net Profitability

A persistently negative net margin signals the company is not converting solid gross profits into bottom-line earnings, limiting retained earnings and ability to self-fund growth. Over months this constrains reinvestment, weakens EPS stability, and raises dependence on balance-sheet actions.

Weak Cash Conversion

Low conversion of accounting earnings into operating cash (0.13) and modest FCF alignment indicate earnings quality and working capital sensitivity. This reduces internal funding for programs or capex and makes the company more reliant on asset sales or external financing for strategic moves.

School/Education Demand Volatility

Heavy reliance on school budgets and district purchasing creates timing and cyclical revenue risk: delayed federal disbursements and slow decision cycles depress near-term sales. Over a multi-month horizon this reduces predictability of Education segment revenue and complicates inventory and staffing planning.

Scholastic Business Overview & Revenue Model

Company Description

Scholastic Corporation publishes and distributes children's books worldwide. It operates in three segments: Children's Book Publishing and Distribution, Education Solutions, and International. The Children's Book Publishing and Distribution segment publishes and distributes children's books, e-books, media, and interactive products through its school book club and fair channels, as well as trade channels. Its original publications include the Harry Potter, Hunger Games, Bad Guys, Baby-Sitters Club graphic novels, Magic School Bus, Captain Underpants, Dog Man, Wings of Fire, Cat Kid Comic Club, Goosebumps, and Clifford The Big Red Dog; and licensed properties comprise the Peppa Pig and Pokemon. In addition, this segment publishes and creates books plus and novelty products for children, including titles, such as the Pastel Studio, Mini Clay World Candy Cart, LEGO Gear Bots, Never Touch series, and other titles under the Klutz and the Make Believe Ideas names; and non-fiction books under the Children's Press and Franklin Watts names. The Education Solutions segment publishes and distributes classroom magazines under the Scholastic News, Scholastic Scope, Storyworks, Let's Find Out, and Junior Scholastic names; supplemental and classroom materials and programs, and related support services; and print and on-line reference, and non-fiction products, as well as consulting services. The International segment offers original trade and educational publishing programs; distributes children's books, digital educational resources, and other materials through school-based book clubs, school-based book fairs, and trade channels; produces and distributes magazines; and provides online subscription services. The company distributes its products and services directly to schools and libraries through retail stores and the Internet. Scholastic Corporation was founded in 1920 and is headquartered in New York, New York.

How the Company Makes Money

Scholastic makes money primarily by selling children’s books and educational materials through a mix of school-based and retail/direct channels, supported by associated content and services. 1) School-based distribution (Book Fairs and Book Clubs) - Book Fairs: Scholastic hosts temporary book fairs in schools, selling books and related products directly to students and families. Revenue is generated from gross product sales at the fair; schools typically receive benefits such as cash or “Scholastic Dollars”/credits tied to sales (the exact mechanism and percentages vary by program and are not provided here). This channel is meaningful because it leverages schools as a distribution network and concentrates demand into event-based selling. - Book Clubs: Scholastic distributes curated catalogs to students through schools; families order books (historically via forms and increasingly online), and Scholastic fulfills the orders. Revenue comes from the sale of books and sets/bundles; teachers and schools often receive rewards/credits based on participation (specific terms not provided here). 2) Trade publishing (Children’s/YA books and related products) - Scholastic publishes and sells its own titles and licensed titles through bookstores, mass merchants, e-commerce retailers, and other wholesale/retail partners. Revenue is generated from wholesale sales to retailers/distributors, direct-to-consumer sales where applicable, and ongoing sales of backlist titles. - Best-selling series and repeatable franchises can create recurring revenue through sequels, boxed sets, special editions, and continued backlist demand. 3) Education solutions and classroom materials - Scholastic sells instructional materials, classroom magazines, literacy programs, and other educational resources to schools and districts. Revenue is generated via institutional purchasing (often through school/district budgets) and may include product subscriptions or multi-year program adoption models where applicable (specific contract structures not provided here). 4) Licensing and content-related income - Scholastic can earn revenue by licensing rights to its intellectual property (e.g., publishing rights by territory/language, adaptations, or other licensed uses) and by selling subsidiary rights related to its publications. The exact mix and materiality of these streams are not provided here. Key factors supporting earnings - A large installed relationship base with schools and educators helps Scholastic market directly to its core audience and drive repeat purchasing through recurring school-year cycles. - Hit titles and recognizable franchises can materially influence sales, while the school calendar and event-driven fairs can create seasonal revenue patterns.

Scholastic Financial Statement Overview

Summary

Strong revenue growth and a healthy gross margin support results, and leverage looks manageable. However, profitability is weak (negative net margin/ROE) and cash conversion versus net income is low, indicating operational efficiency and earnings quality challenges.

Income Statement

Scholastic's income statement shows a mixed performance. The TTM data indicates a gross profit margin of 51.99%, which is healthy, but the net profit margin is negative at -0.21%, indicating a net loss. Revenue growth is strong at 40.3% TTM, suggesting robust sales performance. However, the EBIT and EBITDA margins are relatively low at 1.08% and 6.81% respectively, indicating challenges in operational efficiency.

Balance Sheet

The balance sheet reflects a stable financial position with a debt-to-equity ratio of 0.41 TTM, which is manageable. However, the return on equity is negative at -0.37% TTM, reflecting recent net losses. The equity ratio is not directly provided, but the company maintains a solid equity base relative to its assets, indicating financial stability.

Cash Flow

Cash flow analysis shows a positive trend with a free cash flow growth rate of 6.89% TTM. The operating cash flow to net income ratio is 0.13, suggesting that cash generation is not fully aligned with net income. The free cash flow to net income ratio is 0.52, indicating that the company is generating free cash flow despite net losses.

Breakdown	TTM	May 2025	May 2024	May 2023	May 2022	May 2021
Income Statement
Total Revenue	1.62B	1.63B	1.59B	1.70B	1.64B	1.30B
Gross Profit	842.50M	841.00M	827.50M	862.90M	820.60M	573.30M
EBITDA	110.30M	127.20M	111.30M	203.50M	175.80M	73.90M
Net Income	-3.40M	-1.90M	12.10M	86.30M	80.90M	-11.00M
Balance Sheet
Total Assets	1.99B	1.95B	1.67B	1.87B	1.94B	2.01B
Cash, Cash Equivalents and Short-Term Investments	99.30M	124.00M	113.70M	224.50M	316.60M	366.50M
Total Debt	386.10M	374.50M	122.10M	101.00M	97.10M	282.60M
Total Liabilities	1.06B	1.00B	653.10M	702.20M	722.40M	826.00M
Stockholders Equity	931.20M	946.50M	1.02B	1.16B	1.22B	1.18B
Cash Flow
Free Cash Flow	45.00M	72.00M	96.20M	86.90M	184.00M	23.80M
Operating Cash Flow	86.30M	124.20M	154.60M	148.90M	226.00M	71.00M
Investing Cash Flow	-64.90M	-252.90M	-89.70M	-99.60M	-43.20M	-50.50M
Financing Cash Flow	-63.30M	137.30M	-176.10M	-139.50M	-229.20M	-52.30M

Scholastic Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 33.68
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SCHL, the sentiment is Neutral. The current price of 33.68 is below the 20-day moving average (MA) of 33.89, below the 50-day MA of 33.93, and above the 200-day MA of 27.49, indicating a neutral trend. The MACD of 0.11 indicates Positive momentum. The RSI at 47.78 is Neutral, neither overbought nor oversold. The STOCH value of 27.81 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for SCHL.

Scholastic Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NYT	80 Outperform	$12.94B	32.93	17.55%	0.95%	8.43%	21.38%
SCHL	65 Neutral	$856.88M	3.37	-0.37%	2.78%	2.53%	-23.86%
PSO	64 Neutral	$8.34B	20.71	9.26%	2.11%	1.93%	34.40%
Sector *	60 Neutral	$48.67B	4.58	-11.27%	4.14%	2.83%	-41.78%
LEE	59 Neutral	$198.38M	-1.01	61.72%	―	-8.02%	-44.34%
EDUC	53 Neutral	$11.58M	0.35	9.96%	―	-30.65%	-62.03%

Scholastic Corporate Events

Scholastic Expands Executive Leadership Role, Adjusts Compensation Package

On December 16, 2025, Scholastic’s Board expanded Executive Vice President and Chief Growth Officer Jeffrey Mathews’ responsibilities by formally appointing him President, Education Solutions, a role he had held on an interim basis since June 2025, and approved a revised compensation package reflecting his broader remit. Effective January 1, 2026, his base salary will rise from $615,000 to $675,000, his short-term incentive bonus target was increased from 60% to 70% of base salary retroactive to June 1, 2025 and applied to the full fiscal year ending May 31, 2026 without proration, his long-term equity incentive target for fiscal 2027 awards will align with the higher base salary, and he received a temporary 12‑month severance protection entitling him to 24 months of salary if he resigns due to a compensation downgrade starting January 1, 2026. Also on December 16, 2025, the Human Resources and Compensation Committee approved a $1.5 million special transaction bonus pool for executives and key staff who completed the company’s two sale‑leaseback deals that closed on December 17, 2025, with CFO Haji Glover and Mr. Mathews each receiving $400,000, underscoring management’s emphasis on rewarding leadership for executing strategic real estate transactions.

The most recent analyst rating on (SCHL) stock is a Hold with a $28.00 price target. To see the full list of analyst forecasts on Scholastic stock, see the SCHL Stock Forecast page.

Scholastic completes major real estate sale-leaseback transactions

On December 17, 2025, Scholastic Corporation completed previously announced sale-leaseback transactions for its New York City headquarters at 555-557 Broadway and its primary distribution facility in Jefferson City, Missouri, generating $481 million in gross proceeds and an estimated $401 million in net proceeds after taxes and transaction costs. The company has entered into long-term leases for both properties, including a 15-year lease with renewal options for floors six through twelve of its SoHo headquarters and a 20-year triple-net lease with renewal options for the Jefferson City distribution center, arrangements that shift property-related costs to Scholastic while preserving operational continuity. Management highlighted that monetizing these non-operating real estate assets enhances liquidity, reduces the operating footprint and supports Scholastic’s capital allocation priorities, including share repurchases, positioning the company to focus on long-term growth, operational efficiencies and sustained value creation for shareholders.

The most recent analyst rating on (SCHL) stock is a Hold with a $28.00 price target. To see the full list of analyst forecasts on Scholastic stock, see the SCHL Stock Forecast page.