(PSO) Pearson - Overview
Sector: Communication Services | Industry: Publishing | Exchange: NYSE (USA) | Market Cap: 9.104m USD | Total Return: -5.9% in 12m
Avg Turnover: 13.7M
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Pearson PLC (PSO) is a London-headquartered global education company providing digital courseware, standardized assessments, and professional certifications across five primary business segments. The company operates a diversified portfolio that includes K-12 academic qualifications, virtual schooling, English language testing, and higher education resources in major markets including the United States, Canada, and the Asia Pacific.
The business model has transitioned significantly from traditional print publishing toward digital-first services and recurring subscription revenue. As a major player in the global publishing and education sector, Pearson benefits from the high barriers to entry associated with government-regulated testing contracts and accredited academic certifications.
Investors can further evaluate these shifting revenue streams and segment margins by reviewing the data on ValueRay.
- Generative AI integration into Higher Education courseware determines long-term margin stability
- High-stakes testing demand and Pearson Test of English volume drive organic growth
- Workforce skills gap expansion accelerates Enterprise Learning and Skills segment revenue
- Virtual Learning enrollment trends and contract renewals impact recurring cash flow streams
- US Higher Education student enrollment figures dictate seasonal textbook and digital sales
| Net Income: 767.9m TTM > 0 and > 6% of Revenue |
| FCF/TA: 0.18 > 0.02 and ΔFCF/TA 7.33 > 1.0 |
| NWC/Revenue: 16.26% < 20% (prev 20.24%; Δ -3.99% < -1%) |
| CFO/TA 0.20 > 3% & CFO 1.29b > Net Income 767.9m |
| Net Debt (2.04b) to EBITDA (2.02b): 1.01 < 3 |
| Current Ratio: 2.00 > 1.5 & < 3 |
| Outstanding Shares: last quarter (650.7m) vs 12m ago -5.34% < -2% |
| Gross Margin: 51.49% > 18% (prev 0.50%; Δ 5.10k% > 0.5%) |
| Asset Turnover: 108.2% > 50% (prev 81.21%; Δ 26.99% > 0%) |
| Interest Coverage Ratio: 5.02 > 6 (EBITDA TTM 2.02b / Interest Expense TTM 223.7m) |
| A: 0.18 (Total Current Assets 2.32b - Total Current Liabilities 1.16b) / Total Assets 6.45b |
| B: 0.10 (Retained Earnings 627.9m / Total Assets 6.45b) |
| C: 0.17 (EBIT TTM 1.12b / Avg Total Assets 6.58b) |
| D: 0.36 (Book Value of Equity 997.2m / Total Liabilities 2.79b) |
| Altman-Z'' = 3.02 = A |
| DSRI: 0.78 (Receivables 1.10b/1.08b, Revenue 7.12b/5.45b) |
| GMI: 0.97 (GM 51.49% / 50.15%) |
| AQI: 1.03 (AQ_t 0.61 / AQ_t-1 0.59) |
| SGI: 1.31 (Revenue 7.12b / 5.45b) |
| TATA: -0.08 (NI 767.9m - CFO 1.29b) / TA 6.45b) |
| Beneish M = -3.08 (Cap -4..+1) = AA |
As of May 31, 2026, the stock is trading at USD 14.82 with a total of 912,223 shares traded.
Over the past week, the price has changed by -2.05%,
over one month by +2.56%,
over three months by +16.97% and
over the past year by -5.88%.
Pearson has received a consensus analysts rating of 3.00. Therefore, it is recommended to hold PSO.
- StrongBuy: 0
- Buy: 0
- Hold: 1
- Sell: 0
- StrongSell: 0
| Analysts Target Price | 14.1 | -5.2% |
Market Cap GBP = 6.79b (9.10b USD * 0.7453 USD.GBP)
P/E Trailing = 22.2206
P/E Forward = 18.0505
P/S = 2.5452
P/B = 1.8498
P/EG = 4.2009
Revenue TTM = 7.12b GBP
EBIT TTM = 1.12b GBP
EBITDA TTM = 2.02b GBP
Long Term Debt = 1.00b GBP (from longTermDebt, last quarter)
Short Term Debt = 61.9m GBP (from shortTermDebt, last quarter)
Debt = 2.37b GBP (from shortLongTermDebtTotal, last quarter) + Leases 478.0m
Net Debt = 2.04b GBP (calculated: Debt 2.37b - CCE 333.0m)
Enterprise Value = 8.82b GBP (6.79b + Debt 2.37b - CCE 333.0m)
Interest Coverage Ratio = 5.02 (Ebit TTM 1.12b / Interest Expense TTM 223.7m)
EV/FCF = 7.73x (Enterprise Value 8.82b / FCF TTM 1.14b)
FCF Yield = 12.94% (FCF TTM 1.14b / Enterprise Value 8.82b)
FCF Margin = 16.04% (FCF TTM 1.14b / Revenue TTM 7.12b)
Net Margin = 10.79% (Net Income TTM 767.9m / Revenue TTM 7.12b)
Gross Margin = 51.49% ((Revenue TTM 7.12b - Cost of Revenue TTM 3.45b) / Revenue TTM)
Gross Margin QoQ = 52.88% (prev 51.05%)
Tobins Q-Ratio = 1.37 (Enterprise Value 8.82b / Total Assets 6.45b)
Interest Expense / Debt = 9.43% (Interest Expense 223.7m / Debt 2.37b)
Taxrate = 28.87% (68.6m / 237.5m)
NOPAT = 798.9m (EBIT 1.12b * (1 - 28.87%))
Current Ratio = 2.00 (Total Current Assets 2.32b / Total Current Liabilities 1.16b)
Debt / Equity = 0.65 (Debt 2.37b / totalStockholderEquity, last quarter 3.64b)
Debt / EBITDA = 1.01 (Net Debt 2.04b / EBITDA 2.02b)
Debt / FCF = 1.79 (Net Debt 2.04b / FCF TTM 1.14b)
Total Stockholder Equity = 3.77b (last 4 quarters mean from totalStockholderEquity)
RoA = 11.67% (Net Income 767.9m / Total Assets 6.45b)
RoE = 20.39% (Net Income TTM 767.9m / Total Stockholder Equity 3.77b)
RoCE = 23.55% (EBIT 1.12b / Capital Employed (Equity 3.77b + L.T.Debt 1.00b))
RoIC = 15.31% (NOPAT 798.9m / Invested Capital 5.22b)
WACC = 7.16% (E(6.79b)/V(9.16b) * Re(7.32%) + D(2.37b)/V(9.16b) * Rd(9.43%) * (1-Tc(0.29)))
Discount Rate = 7.32% (= CAPM, Blume Beta Adj.)
Shares (quarterly) Correlation: -94.39 | Cagr: -6.28%
[DCF] Terminal Value 77.97% ; FCFF base≈963.6m ; Y1≈1.10b ; Y5≈1.63b
[DCF] Fair Price = 37.22 (EV 24.5b - Net Debt 2.04b = Equity 22.4b / Shares 602.5m; r=8.35% [WACC [floored]]; 5y FCF grow 15.0% → 2.50% )
EPS Correlation: N/A | EPS CAGR: N/A | SUE: N/A | # QB: 0
Revenue Correlation: 86.38 | Revenue CAGR: 15.56% | SUE: N/A | # QB: 0
EPS current Year (2026-12-31): EPS=0.95 | Chg30d=+4.54% | Revisions=+20% | GrowthEPS=+11.0% | GrowthRev=+4.3%
EPS next Year (2027-12-31): EPS=1.07 | Chg30d=+3.06% | Revisions=+20% | GrowthEPS=+12.1% | GrowthRev=+4.7%