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Scholastic
(NASDAQ:SCHL)
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Rating:66Neutral
Price Target:
$50.00
▲(25.72% Upside)
Action:Downgraded
Date:03/21/26
The score is driven primarily by mixed financial performance—recovering profitability but pressured revenue and softer free cash flow—tempered by a constructive technical uptrend. The latest earnings call adds support via reaffirmed guidance and aggressive share repurchases funded by sale-leaseback proceeds, while valuation is only moderately favorable given the limited usefulness of the provided P/E.
Positive Factors
Strong Intellectual Property Franchise
Well‑known franchises (Hunger Games, Dog Man, Wings of Fire) create durable revenue streams via new releases, backlist sales, licensing and cross‑format monetization. This IP base supports recurring demand, higher margins on bestselling titles, and long‑term brand equity that cushions top‑line volatility.
Negative Factors
Significant Revenue Contraction
A sharp multi‑period revenue decline undermines operating scale and long‑run margin sustainability. Persistent top‑line weakness limits fixed‑cost absorption, pressures unit economics across Trade and International segments, and raises execution risk for returning to historical profitability levels.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong Intellectual Property Franchise
Well‑known franchises (Hunger Games, Dog Man, Wings of Fire) create durable revenue streams via new releases, backlist sales, licensing and cross‑format monetization. This IP base supports recurring demand, higher margins on bestselling titles, and long‑term brand equity that cushions top‑line volatility.
Read all positive factors
Scholastic (SCHL) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.01B
Dividend Yield2.78%
Average Volume (3M)322.36K
Price to Earnings (P/E)18.1
Beta (1Y)0.81
Revenue Growth1.38%
EPS Growth296.53%
CountryUS
Employees7,090
SectorCommunication Services
Sector Strength97
IndustryPublishing
Share Statistics
EPS (TTM)2.58
Shares Outstanding20,914,276
10 Day Avg. Volume247,005
30 Day Avg. Volume322,363
Financial Highlights & Ratios
PEG Ratio2.15
Price to Book (P/B)0.50
Price to Sales (P/S)0.29
P/FCF Ratio6.63
Enterprise Value/Market Cap1.24
Enterprise Value/Revenue0.78
Enterprise Value/Gross Profit1.38
Enterprise Value/Ebitda5.70
Forecast
1Y Price Target
$42.00Price Target Upside5.61% Upside
Rating ConsensusHold
Number of Analyst Covering1
EPS Forecast (FY)2.67
Revenue Forecast (FY)$1.69B
Scholastic Business Overview & Revenue Model
Company Description
Scholastic Corporation, a company founded in 1920 and headquartered in New York, New York, specializes in the global creation and distribution of literary and educational materials for young people. Its operations are structured into three key bus...
How the Company Makes Money
Scholastic primarily makes money by selling children’s books and educational materials through multiple distribution channels, with revenue concentrated in its school-based and trade businesses. A major driver is its school channel, where it gener...
Scholastic Earnings Call Summary
Earnings Call Date:Mar 19, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Jul 23, 2026
Earnings Call Sentiment Positive
The call reflected meaningful balance sheet and shareholder‑friendly achievements (>$400M sale‑leaseback proceeds, aggressive buybacks, net cash position, reaffirmed FCF and adjusted EBITDA guidance) alongside operational and seasonal headwinds (modest revenue decline, adjusted EBITDA pressured by sale‑leaseback, Trade and International softness, and tariff costs). Franchise strength (Hunger Games, Dog Man, Wings of Fire), Book Fairs momentum, digital/audience growth, and improving Education profitability are substantial positives that largely offset the near‑term quarter‑specific challenges. Management reiterated confidence in Q4 seasonality, cost mitigation, and longer‑term stabilization and growth actions.Positive Updates
Sale‑Leaseback and Balance Sheet Optimization
Completed sale‑leaseback of NYC HQ and Jefferson City facility unlocking >$400 million in net proceeds; fully repaid revolver and ended the quarter with net cash of $90.6 million (vs. net debt of $136.6 million at FY25 end); Q3 free cash flow was $407 million (driven by sale proceeds) and management reaffirmed FY26 free cash flow to exceed $430 million.
Negative Updates
Consolidated Revenue and Profitability Pressure
Consolidated Q3 revenues declined 1.9% to $329.1 million (from $335.4 million). Adjusted operating loss widened to $24.3 million (vs. $20.9 million prior year) and adjusted EBITDA fell to approximately breakeven (from $6 million a year ago), driven in part by the sale‑leaseback impact.
Read all updates
Q3-2026 Updates
Positive
Negative
Sale‑Leaseback and Balance Sheet Optimization
Completed sale‑leaseback of NYC HQ and Jefferson City facility unlocking >$400 million in net proceeds; fully repaid revolver and ended the quarter with net cash of $90.6 million (vs. net debt of $136.6 million at FY25 end); Q3 free cash flow was $407 million (driven by sale proceeds) and management reaffirmed FY26 free cash flow to exceed $430 million.
Read all positive updates
Company Guidance
Management reaffirmed fiscal 2026 guidance with full‑year revenue expected to be approximately flat year‑over‑year, adjusted EBITDA of $146–$156 million (including an estimated ~$14 million partial‑year headwind from the December sale‑leaseback), and free cash flow to exceed $430 million (benefiting from the >$400 million net proceeds from the sale‑leaseback and Q3 free cash flow of $407 million); they expect a seasonal return to profitability in Q4 and revenue growth in School Reading Events and Entertainment versus slightly lower Trade and International revenues versus tough prior‑year comps. The company established long‑term net‑leverage targets of 2.0×–2.5× adjusted EBITDA, authorized a $300 million repurchase program (a $200 million modified Dutch‑auction tender offer at $36–$40 per share and $100 million for open‑market repurchases), said the tender will run Mar 23–Apr 20 and be funded with cash and credit, and noted it has already repurchased >4.4 million shares for ~ $147 million at an average $33.30; other key figures mentioned include Q3 revenues of $329.1 million, Q3 net cash of $90.6 million (versus FY25 net debt $136.6 million), and an expected ~ $10 million of incremental tariff expense for the year.Scholastic Financial Statement Overview
Summary
Income Statement
54
Neutral
Balance Sheet
62
Positive
Cash Flow
49
Neutral
| Breakdown | TTM | May 2025 | May 2024 | May 2023 | May 2022 | May 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.61B | 1.63B | 1.59B | 1.70B | 1.64B | 1.30B |
| Gross Profit | 907.40M | 906.70M | 884.60M | 917.60M | 877.40M | 671.60M |
| EBITDA | 219.90M | 105.30M | 85.10M | 178.40M | 157.50M | 52.90M |
| Net Income | 62.70M | -1.90M | 12.10M | 86.30M | 81.00M | -11.00M |
Balance Sheet | ||||||
| Total Assets | 1.78B | 1.95B | 1.67B | 1.87B | 1.94B | 2.01B |
| Cash, Cash Equivalents and Short-Term Investments | 104.60M | 124.00M | 113.70M | 224.50M | 316.60M | 366.50M |
| Total Debt | 284.60M | 374.50M | 122.10M | 101.00M | 97.10M | 282.60M |
| Total Liabilities | 908.90M | 1.00B | 653.10M | 702.20M | 722.40M | 826.00M |
| Stockholders Equity | 871.90M | 946.50M | 1.02B | 1.16B | 1.22B | 1.18B |
Cash Flow | ||||||
| Free Cash Flow | 22.10M | 72.00M | 96.20M | 86.90M | 184.00M | 23.80M |
| Operating Cash Flow | 67.80M | 124.20M | 154.60M | 148.90M | 226.00M | 71.00M |
| Investing Cash Flow | 385.10M | -252.90M | -89.70M | -99.60M | -43.20M | -50.50M |
| Financing Cash Flow | -447.20M | 137.30M | -176.10M | -139.50M | -229.20M | -52.30M |
Scholastic Technical Analysis
Positive
39.77
Price Trends
42.51
Positive
39.73
Positive
34.83
Positive
Market Momentum
1.09
Positive
66.20
Neutral
49.59
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SCHL, the sentiment is Positive. The current price of 39.77 is below the 20-day moving average (MA) of 44.72, below the 50-day MA of 42.51, and above the 200-day MA of 34.83, indicating a bullish trend. The MACD of 1.09 indicates Positive momentum. The RSI at 66.20 is Neutral, neither overbought nor oversold. The STOCH value of 49.59 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SCHL.
Scholastic Risk Analysis
Scholastic disclosed 25 risk factors in its most recent earnings report. Scholastic reported the most risks in the "Ability to Sell" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Scholastic Peers Comparison
UnderperformOutperform
Sector (60)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $12.15B | 31.06 | 19.22% | 0.95% | 10.41% | 27.40% | |
66 Neutral | $1.01B | 18.12 | 6.91% | 2.78% | 1.38% | 296.53% | |
66 Neutral | $12.62M | 4.23 | 9.96% | ― | -34.31% | ― | |
65 Neutral | $10.57B | 23.63 | 9.26% | 2.11% | 3.91% | -19.81% | |
60 Neutral | $48.67B | 4.58 | -11.27% | 4.14% | 2.83% | -41.78% | |
54 Neutral | $174.95M | -2.97 | 46.64% | ― | -9.93% | 66.64% |
* Communication Services Sector Average
SCHL
Scholastic
46.75
26.11
126.49%
EDUC
Educational Development
1.48
0.18
13.85%
LEE
Lee Enterprises
7.82
1.21
18.31%
NYT
New York Times
72.98
19.24
35.81%
PSO
Pearson
16.57
2.75
19.86%
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.