Scholastic (NASDAQ: SCHL) presents an attractive investment opportunity as it trades at a price-to-book ratio of just
0.82X, indicating that the stock is undervalued compared to its assets. With total revenue reaching
1.6B and a solid EBITDA of
126.7M, the company demonstrates strong operational efficiency, which could lead to a rebound in stock price as market conditions improve. Additionally, the forward dividend rate of
0.8 reflects a commitment to returning value to shareholders, making it a compelling choice for investors looking for stability in the publishing sector. As Scholastic navigates its fiscal year ending in May, the potential for growth and recovery in October looks promising.
Important Highlights
Scholastic has $123.8 million in liabilities and a low debt-to-equity ratio of 0.08, suggesting the company isn't fully leveraging borrowing to fuel growth. With a beta of 1.73, Scholastic carries a higher risk compared to the overall market. This means that while the stock may rise when the market does, it could also fall more sharply during downturns. Currently, Scholastic faces a negative expected return of -0.22%. Investors should check the company's Treynor ratio and examine the connection between kurtosis and the day median price to assess whether Scholastic's past performance might repeat in the near future.
We determine the current worth of Scholastic using both absolute as well as relative valuation methodologies to arrive at its intrinsic value. In general, an absolute valuation paradigm, as applied to this company, attempts to find the value of Scholastic based exclusively on its
fundamental and basic
technical indicators. By analyzing Scholastic's
financials, quarterly and monthly indicators, and related drivers such as
dividends, operating cash flow, and various types of growth rates, we attempt to find the most accurate representation of
Scholastic's intrinsic value. In some cases, mostly for established, large-cap companies, we also incorporate more traditional valuation methods such as dividend discount, discounted cash flow, or asset-based models. As compared to an absolute model, our relative valuation model uses a comparative analysis of Scholastic. We calculate exposure to Scholastic's
market risk, different
technical and
fundamental indicators, relevant financial multiples and ratios, and then
comparing them to Scholastic's related companies.
Scholastic Investment Alerts
Scholastic investment alerts and warnings help investors to get more proficient at understanding not only critical technical and fundamental signals but also the significant portfolio-centered indicators. These indicators include beta, alpha, and other risk-related measures that will help you in monitoring Scholastic performance across your portfolios.Please check all
investment alerts for Scholastic
Scholastic Valuation Ratios as Compared to Competition
Our valuation model uses many indicators to compare Scholastic value to that of its competitors to determine the firm's financial worth. You can analyze the relationship between different fundamental ratios across Scholastic competition to find
correlations between indicators driving the intrinsic value of Scholastic.
Scholastic Gross Profit
Scholastic Gross Profit growth is one of the most critical measures in evaluating the company. The Gross Profit growth rate is calculated simply by comparing Scholastic previous period's values with its current period's values. Each time period you're measuring should be of equal lengths the increase or decrease, in a company's Gross Profit between two periods. Here we show Scholastic Gross Profit growth over the last 10 years. Please check Scholastic's
gross profit and other
fundamental indicators for more details.
What is the case for Scholastic Investors
Scholastic reported the previous year's revenue of 1.59
B. Net Income was 12.1
M with profit before overhead, payroll, taxes, and interest of 877.4
M.
Margins Breakdown
Scholastic profit margins show the degree to which it makes money. Margin indicators are used not only by investors but also by creditors or Scholastic itself as indicators of financial health and management effectiveness. Please look more closely at the different varieties of Scholastic profit margins.
| Pretax Profit Margin | 0.009681 |
| Operating Profit Margin | 0.02 |
| Net Profit Margin | 0.007231 |
| Gross Profit Margin | 0.58 |
Scholastic PTB Ratio is increasing over the last 8 years. The latest value of Scholastic PTB Ratio is 1.69.
Further, Scholastic Market Cap is quite stable at the moment. In the world of investing, timing can be everything. Scholastic (NASDAQ: SCHL) is showing signs of a potential rebound this October, driven by its solid fundamentals. With a current ratio of 1.48X and a manageable debt-to-equity ratio of just 0.08%, the company is well-positioned to navigate financial challenges. Despite recent losses of 12.1 million in net income from continuing operations, Scholastic's book value per share stands at 36.05, indicating that the stock is trading at a price-to-book ratio of 0.82X, suggesting it may be undervalued. Additionally, with a forward dividend yield of 2.7%, investors can expect some income while waiting for the stock to recover..
Is Scholastic showing proof of lower volatility?
Scholastic's recent Information Ratio of -0.09 signals potential trouble for the stock, suggesting it may struggle to maintain its value. This negative ratio raises concerns about the company's ability to provide steady returns relative to its risks, hinting at possible volatility ahead. Investors should monitor market trends and Scholastic's performance closely, as it may not be the reliable investment it once seemed.
Additionally, Scholastic shows very low volatility, with a skewness of -3.97 and kurtosis of 24.71. Understanding these volatility trends can help investors make informed decisions. Increased volatility during bear markets can significantly affect Scholastic's stock price, causing stress for investors as they see their shares lose value.
This often leads to portfolio rebalancing as they seek to mitigate losses.Investing in Scholastic stock presents a mixed bag of opportunities and risks. While the current market value stands at
29.67, analysts are not particularly optimistic, with a consensus leaning towards a strong sell. The estimated target price is significantly higher at
57, suggesting that there could be potential upside if the company can turn things around. However, with a real value pegged at
36.94, investors should tread carefully. As the fiscal year ends in May, keeping an eye on upcoming earnings reports and market trends will be crucial for anyone considering a stake in this iconic publisher..
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Raphi Shpitalnik is a Junior Member of Macroaxis Editorial Board. Raphael is a young entrepreneur who joined Macroaxis on a part-time basis at the beginning of the pandemic and eventually acquired a real taste for investing and fintech. He likes to analyze different equity instruments across a wide range of industries, focusing primarily on consumer products, sports, fintech, cannabis, and AI.
View Profile This story should be regarded as informational only and should not be considered a solicitation to sell or buy any financial products. Macroaxis does not express any opinion as to the present or future value of any investments referred to in this post. This post may not be reproduced without the consent of Macroaxis LLC. Macroaxis LLC and Raphi Shpitalnik do not own shares of Scholastic. Please refer to our
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