Shares of McGraw Hill Inc (NYSE:MH) fell on Friday, even after the company reported upbeat fiscal fourth-quarter results.
Here are some key analyst takeaways:
- BTIG analyst Marvin Fong maintained a Buy rating, while cutting the price target from $22 to $19.
- Needham analyst Ryan MacDonald reiterated a Buy rating and price target of $19.
Check out other analyst stock ratings.
BTIG: McGraw Hill reported revenues $24 million higher than expectations, driven by Higher Education revenues coming in $20 million above Street expectations, Fong said in a note. The guidance reflects that K-12 dynamics in California and Texas are "choppier than expected," and that Higher Education remains "a bulwark of strength," he added.
McGraw Hill is leveraging agentic tools to access new growth avenues, not limited to the education market, "with healthcare representing a prime opportunity," the analyst wrote. He noted that the fiscal 2027 guidance included:
- Revenue outlook of $2.115-$2.175 billion, with the midpoint missing the consensus of $2.16 billion
- Adjusted EBITDA of $750-$790 million, with the midpoint slightly above the consensus of $766 million
Needham: McGraw Hill reported revenues of $463.7 million and adjusted EBITDA of $130.6 million, both topping expectations, MacDonald said. The K-12 business continued to decline year-on-year, although management expects a return to growth in the near term, he added.
Despite Higher Education generating higher-than-expected revenues of $258.3 million, up 1.6% year-on-year, recurring revenues in this business declined by 4.9%, the analyst stated. "That said, net dollar retention reached 114% and customer satisfaction reached its higher level ever," he further wrote.
MH Price Action: McGraw Hill shares were down 3.16% at $11.97 at the time of publication on Friday, according to Benzinga Pro data.
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