Scholastic (SCHL)
NASDAQ:SCHL
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Scholastic
(NASDAQ:SCHL)
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Rating:66Neutral
Price Target:
$40.00
▲(1.42% Upside)
Action:DowngradedDate: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
School-based distribution (Book Fairs/Clubs)
Scholastic’s school-channel network is a durable distribution moat: recurring, institutionally anchored Book Fairs/Clubs generate repeat seasonal revenue, concentrate demand, and promote discovery of new titles. This entrenched access to students and educators supports stable sales and customer stickiness over multiple years.
Negative Factors
Material top-line contraction
A very large TTM revenue decline undermines scale economics and limits operating leverage, making margin recovery harder. Sustained top‑line weakness reduces pricing power, compresses fixed-cost absorption, and raises the bar for returning to consistent multi‑year growth without new product or channel expansion.
Read all positive and negative factors
Positive Factors
Negative Factors
School-based distribution (Book Fairs/Clubs)
Scholastic’s school-channel network is a durable distribution moat: recurring, institutionally anchored Book Fairs/Clubs generate repeat seasonal revenue, concentrate demand, and promote discovery of new titles. This entrenched access to students and educators supports stable sales and customer stickiness over multiple years.
Read all positive factors
Scholastic (SCHL) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$857.52M
Dividend Yield2.78%
Average Volume (3M)561.66K
Price to Earnings (P/E)3.5
Beta (1Y)0.93
Revenue Growth2.53%
EPS Growth-23.86%
CountryUS
Employees4,770
SectorCommunication Services
Sector Strength97
IndustryPublishing
Share Statistics
EPS (TTM)-0.15
Shares Outstanding20,914,276
10 Day Avg. Volume576,135
30 Day Avg. Volume561,656
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 Cap1.37
Enterprise Value/Revenue0.73
Enterprise Value/Gross Profit1.39
Enterprise Value/Ebitda11.07
Forecast
1Y Price Target
$40.00Price Target Upside1.42% Upside
Rating ConsensusHold
Number of Analyst Covering1
EPS Forecast (FY)1.48
Revenue Forecast (FY)$1.62B
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 segmen...
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...
Scholastic Earnings Call Summary
Earnings Call Date:Mar 19, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Jul 16, 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 | 844.50M | 841.00M | 827.50M | 862.90M | 820.60M | 573.30M |
| EBITDA | 106.10M | 127.20M | 111.30M | 203.50M | 175.80M | 73.90M |
| Net Income | 62.70M | -1.90M | 12.10M | 86.30M | 80.90M | -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
39.44
Price Trends
35.47
Positive
32.83
Positive
29.09
Positive
Market Momentum
1.32
Negative
69.74
Neutral
74.38
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 39.44 is above the 20-day moving average (MA) of 37.33, above the 50-day MA of 35.47, and above the 200-day MA of 29.09, indicating a bullish trend. The MACD of 1.32 indicates Negative momentum. The RSI at 69.74 is Neutral, neither overbought nor oversold. The STOCH value of 74.38 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 |
|---|---|---|---|---|---|---|---|
80 Outperform | $13.30B | 32.93 | 17.55% | 0.95% | 8.43% | 21.38% | |
66 Neutral | $857.52M | 3.53 | 6.91% | 2.78% | 2.53% | -23.86% | |
64 Neutral | $8.27B | 20.71 | 9.26% | 2.11% | 1.93% | 34.40% | |
60 Neutral | $48.67B | 4.58 | -11.27% | 4.14% | 2.83% | -41.78% | |
54 Neutral | $196.73M | -1.01 | 61.72% | ― | -8.02% | -44.34% | |
47 Neutral | $11.32M | 0.35 | 9.96% | ― | -30.65% | -62.03% |
* Communication Services Sector Average
SCHL
Scholastic
39.57
23.69
149.10%
EDUC
Educational Development
1.34
0.16
13.56%
LEE
Lee Enterprises
8.45
-0.50
-5.64%
NYT
New York Times
79.01
31.10
64.91%
PSO
Pearson
13.38
-1.86
-12.20%
Scholastic Corporate Events
Business Operations and StrategyStock Buyback
Scholastic Announces $200 Million Dutch Auction Tender Offer
Positive
Mar 19, 2026
On March 19, 2026, Scholastic Corporation announced that its board had authorized the repurchase of up to $200 million of its common stock through a modified Dutch auction tender offer, at an anticipated price range of $36 to $40 per share. The of...
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.