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Scholastic Corp. (SCHL)
NASDAQ:SCHL
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Scholastic (SCHL) AI Stock Analysis

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SCHL

Scholastic

(NASDAQ:SCHL)

Rating:66Neutral
Price Target:
$23.00
▼(-11.74% Downside)
Scholastic's stock score is influenced by its stable financial performance and strong cash flow, despite challenges in profitability and equity decrease. The technical indicators suggest overbought conditions, while the valuation is high but offset by a good dividend yield. The earnings call provided a mixed sentiment with both growth and challenges.

Scholastic (SCHL) vs. SPDR S&P 500 ETF (SPY)

Scholastic Business Overview & Revenue Model

Company DescriptionScholastic Corporation (SCHL) is a leading global children's publishing, education, and media company. It operates in three primary segments: Children's Book Publishing and Distribution, Educational Solutions, and International. Scholastic is renowned for its broad range of children's books, educational materials, and digital content. The company is well-known for popular book series such as Harry Potter, The Hunger Games, and Captain Underpants, and it is a trusted partner for educators and parents worldwide.
How the Company Makes MoneyScholastic makes money primarily through its Children's Book Publishing and Distribution segment, which includes sales from trade publishing and book fairs. This segment is a significant revenue driver, leveraging both direct-to-consumer sales and partnerships with schools to distribute books and educational materials. The Educational Solutions segment contributes to revenue through the sale of curriculum materials, professional learning resources, and digital educational platforms aimed at enhancing classroom learning experiences. Scholastic also earns income internationally by adapting its successful models to local markets outside the United States. Key factors contributing to its earnings include brand recognition, a diverse product portfolio, and strategic partnerships with educational institutions and retailers.

Scholastic Earnings Call Summary

Earnings Call Date:Jul 24, 2025
(Q4-2025)
|
% Change Since: |
Next Earnings Date:Sep 18, 2025
Earnings Call Sentiment Positive
The earnings call highlighted Scholastic's strong performance in several key areas, including Children's Book Publishing, strategic acquisitions, and cost management, which contributed to positive financial results. However, challenges in the Education segment and external pressures such as tariffs and inflation were notable concerns.
Q4-2025 Updates
Positive Updates
Strong Financial and Strategic Results
Adjusted EBITDA grew robustly, in line with original guidance range. Revenue growth was driven by strong performance in the Children's Book Publishing and Distribution segment and the strategic acquisition of 9 Story Media Group.
Successful Book Launches
Sunrise on the Reaping, the newest Hunger Games series installment, became a global best-seller, selling over 2 million copies in its first month in the U.S. alone.
Book Fairs and Book Clubs Performance
Higher fair counts with over 100,000 fairs for the year and profit contributions from clubs rose.
Shareholder Returns
Invested over $35 million in dividends and share repurchases in the fourth quarter, totaling $92 million for fiscal 2025.
Entertainment Segment Growth
Fourth quarter revenue increased due to the integration of 9 Story Media Group, enhancing content reach and monetization.
International Segment Growth
Revenue and profit increased due to strong trade channel performance.
Cost Savings and Efficiency Initiatives
Achieved $25 million in cost savings on an annualized basis, with $15 million realized during fiscal 2025.
Negative Updates
Education Segment Challenges
Revenue and profit declined due to pressures in the supplemental curriculum market and lower school district spending.
Tariff and Inflationary Pressures
Expected incremental tariff expenses of $10 million and inflationary impacts, particularly affecting non-book items.
Free Cash Flow Decrease
Free cash flow was $29.2 million in fiscal 2025 compared to $73.4 million in the prior year.
Entertainment Segment Operating Loss
Adjusted operating loss increased due to incremental amortization expenses related to the acquisition of 9 Story Media Group.
Company Guidance
During the Scholastic Fiscal Year 2025 Fourth Quarter Earnings Call, the company reported robust growth in adjusted EBITDA, aligning with their original guidance. Revenue for the fourth quarter increased by 7% to $508.3 million, bringing the fiscal year's total to $1,625.5 million, a 2% growth. The Children's Book Publishing and Distribution segment saw a 9% rise in revenue for the quarter, driven by the success of new releases like "Sunrise on the Reaping." Despite a decline in the Education segment's revenue by 7% for the quarter, the Entertainment segment's revenue surged to $14.8 million due to the integration of 9 Story Media Group. Scholastic's strategic initiatives, including organizational changes, have positioned them for continued earnings growth in fiscal 2026, with a projected adjusted EBITDA increase of 20%, excluding $10 million in anticipated tariff expenses. The company also returned $92 million to shareholders through dividends and share repurchases in fiscal 2025 and plans to explore potential monetization of real estate assets.

Scholastic Financial Statement Overview

Summary
Scholastic displays a stable financial position with consistent revenue and a strong cash flow, but profitability metrics like net profit and ROE leave room for improvement. The balance sheet is robust with solid equity backing, although a decrease in equity and low profitability margins are concerns.
Income Statement
73
Positive
Scholastic shows a stable revenue base with a slight growth in the TTM period compared to the previous year. The gross profit margin remains solid at around 64.6% for TTM but has decreased slightly from 65.5% in the previous year. The EBIT margin of 1.8% is relatively low, indicating limited operational efficiency, however, it has shown improvement from previous periods. Net profit margin stands at 1.2% for TTM, reflecting modest profitability.
Balance Sheet
68
Positive
Scholastic's balance sheet reveals a moderate debt-to-equity ratio of 0.41, suggesting manageable leverage. The equity ratio is strong at 48%, indicating solid asset backing by equity. ROE of 1.98% in the TTM period is low, pointing to modest returns on shareholder investments. There is a noted decrease in stockholders' equity over time, which may warrant attention.
Cash Flow
75
Positive
The company demonstrates a healthy operating cash flow to net income ratio of 4.69 for TTM, indicating strong cash generation relative to net income. Free cash flow growth rate has declined but remains positive, indicating some level of reinvestment capacity. The free cash flow to net income ratio is 1.46, showing good cash conversion from profits.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue1.59B1.59B1.70B1.64B1.30B1.49B
Gross Profit873.30M884.60M917.60M877.40M633.80M736.10M
EBITDA101.30M85.10M203.50M175.80M52.90M-22.70M
Net Income18.60M12.10M86.50M81.00M-10.90M-43.70M
Balance Sheet
Total Assets1.96B1.67B1.87B1.94B2.01B2.03B
Cash, Cash Equivalents and Short-Term Investments94.70M113.70M224.50M316.60M366.50M393.80M
Total Debt390.70M123.80M101.00M97.10M282.60M11.60M
Total Liabilities1.02B653.10M340.00M722.40M826.00M853.00M
Stockholders Equity941.30M1.02B1.16B1.22B1.18B1.18B
Cash Flow
Free Cash Flow27.10M96.20M86.90M184.00M23.80M-63.90M
Operating Cash Flow87.20M154.60M148.90M226.00M71.00M2.10M
Investing Cash Flow-252.20M-89.70M-99.60M-43.20M-50.50M-95.70M
Financing Cash Flow150.90M-176.10M-139.50M-229.20M-52.30M154.10M

Scholastic Technical Analysis

Technical Analysis Sentiment
Positive
Last Price26.06
Price Trends
50DMA
23.69
Positive
100DMA
20.83
Positive
200DMA
20.78
Positive
Market Momentum
MACD
0.49
Positive
RSI
59.60
Neutral
STOCH
31.25
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 26.06 is above the 20-day moving average (MA) of 25.31, above the 50-day MA of 23.69, and above the 200-day MA of 20.78, indicating a bullish trend. The MACD of 0.49 indicates Positive momentum. The RSI at 59.60 is Neutral, neither overbought nor oversold. The STOCH value of 31.25 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

Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
77
Outperform
$9.64B30.4717.13%1.05%7.82%19.39%
72
Outperform
$9.14B16.5911.74%2.10%1.93%34.40%
66
Neutral
$621.99M37.85-0.19%3.07%2.25%-103.50%
60
Neutral
$46.29B4.07-13.11%4.12%1.85%-42.71%
60
Neutral
$602.60M6.6147.54%-8.00%
47
Neutral
$24.43M0.00%-5.68%-127.26%
42
Neutral
$9.53M-12.07%-32.68%-3656.21%
* Communication Services Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
SCHL
Scholastic
26.06
-3.17
-10.85%
EDUC
Educational Development
1.10
-0.92
-45.54%
LEE
Lee Enterprises
4.09
-3.67
-47.29%
NYT
New York Times
58.99
6.89
13.22%
PSO
Pearson
14.19
0.67
4.96%
GCI
Gannett
4.29
-0.07
-1.61%

Scholastic Corporate Events

Executive/Board ChangesBusiness Operations and Strategy
Scholastic Announces Director Retirements and Strategic Updates
Neutral
Jun 23, 2025

On June 20, 2025, Scholastic Corporation announced the planned retirements of directors David Young and John L. Davies, effective at the annual meeting on September 17, 2025. Their departures are not due to disagreements with the company. Scholastic also updated its strategic and operational initiatives, focusing on enhancing shareholder value through cost management, restructuring, and potential real estate transactions. The company aims to maintain its fiscal 2025 Adjusted EBITDA guidance and is actively seeking new independent directors to support its growth and transformation strategies.

Executive/Board ChangesBusiness Operations and Strategy
Scholastic Announces New Children’s Book Group Integration
Positive
May 29, 2025

On May 29, 2025, Scholastic Corporation announced the integration of its Trade Publishing, Book Fairs, and Book Clubs divisions into a new Children’s Book Group, effective June 1, 2025. This strategic move, led by Sasha Quinton, aims to strengthen Scholastic’s position in children’s publishing by creating a cohesive approach across all channels. Jackie De Leo, a seasoned leader from Barnes & Noble, joins as Publisher and Chief Merchant to enhance the company’s editorial and merchandising capabilities. The reorganization is expected to expand Scholastic’s reach and value, ensuring its stories and characters continue to resonate with children globally.

Executive/Board Changes
Scholastic Announces Leadership Transition in Legal Department
Neutral
May 27, 2025

On May 21, 2025, Scholastic Corporation announced the retirement of Andrew S. Hedden from his roles as Executive Vice President, General Counsel, and Secretary, effective May 31, 2025. Hedden, who has been with the company since 2008, will transition to a role as Senior Counselor. Chris Lick, currently the Deputy General Counsel, will succeed Hedden as Executive Vice President, General Counsel, and Secretary, effective June 1, 2025. This leadership change marks a significant transition within Scholastic’s legal department, potentially impacting its strategic direction and operations.

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.Date of analysis: Jun 24, 2025