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Our Company McGraw Hill is a leading global provider of education solutions for K-12, higher education and professional learning markets. We are helping shape the education industry by providing access to effective learning experiences that improve outcomes and opportunities for all.
$10.36
+$0.44 (+4.44%)
Live · 03:00 PM
Margins and capital returns are both well above average: 50.24% operating margin, ROIC at 30.28%. Consistent with durable pricing power, though that alone doesn't make it a buy.
Revenue growth slowed to 0.1%, essentially flat. This is a business that needs a catalyst.
At 55x earnings, the current multiple leaves limited room for execution misses or growth deceleration. Free cash flow declined 57% versus the prior year, cash generation momentum has weakened.
54.5x earnings, 7.7x FCF. The market is pricing in years of above-average growth. If that thesis breaks, downside from multiple compression alone could be 30%+. This is a stock where you're paying for the future, not the present.
Based on TTM earnings · Diluted shares
Profitability & Returns
Revenue (TTM)
$2.10B
Net Income (TTM)
$35M
▲ +141.1% YoY
Op. Margin
50.24%
▲ +0.3pp YoY
ROIC
30.28%
▼ -18.5pp YoY
Cash Flow & Balance Sheet
FCF (TTM)
$246M
▼ -57.2% YoY
Op. Cash Flow (TTM)
$331M
▼ -48.8% YoY
Net Debt
$2.40B
Cash & Equiv.
$254M
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At a P/E of 54.5 and a price-to-free-cash-flow of 7.7, McGraw Hill (MH) trades below a two-stage DCF intrinsic value of about $43.48 per share, so at $10.36 the stock looks undervalued (319.7% below estimated intrinsic value). A high multiple is not the same as overvalued: fast-growing, high-quality businesses can deserve a premium. See the general approach in how to tell if a stock is overvalued.
On quality, McGraw Hill scores 67/100 on Intrinsiqq's quality scorecard (a solid business on these measures), weighing growth, margins, returns on capital, share count, and balance-sheet strength. All figures are computed from SEC filings; read the full methodology. This is analysis, not investment advice.
Intrinsiqq's two-stage DCF estimates an intrinsic value of about $43.48 per share for MH, projecting its recent free cash flow forward with a growth rate that fades toward a long-run rate and discounting it back to today. Applying a 25% margin of safety gives a more conservative fair-value entry around $32.61. At today's $10.36, that puts the stock about 319.7% below estimated intrinsic value. The result is sensitive to the growth and discount-rate inputs, so it is best to run conservative, base and optimistic cases. You can adjust all of them yourself with the sliders on the DCF tab.
McGraw Hill scores 67 out of 100 on Intrinsiqq's quality score, a weighted blend of 8 metrics each scored 0 to 100, which makes it a solid business on these measures. Recent fundamentals include a 50.2% operating margin and a 30.3% return on invested capital. The score weighs revenue and free-cash-flow growth, operating margins, return on invested capital, share-count change, and balance-sheet strength, all computed from SEC filings, not opinion. Because valuation only means something relative to quality, the full metric-by-metric breakdown is on the quality scorecard.
That depends on valuation and quality together, not either alone. MH currently trades below its estimated intrinsic value and scores 67/100 on quality (solid). A cheap price is only a bargain if the business is durable, and a premium can be justified by genuine quality, so the two questions, "is it cheap?" and "is it good?", only make sense side by side. Read the valuation against the quality scorecard, run the DCF on your own assumptions, and decide for yourself. This is analysis from SEC filings, not investment advice.