Intrinsiqq
Pearson plc Sponsored ADR logoPearson plc Sponsored ADRPSO
$18.23+2.07%
Pearson plc Sponsored ADR logo

Pearson plc Sponsored ADR

PSO

$18.23

+$0.37 (+2.07%)

⊜ Compare
ProfitabilitySolid marginsGrowthModeratingCash FlowHealthy conversionValuationNot cheap
What stands out

16.66% operating margin is respectable but not wide. ROIC at 8.21%. Suggests the business covers its cost of capital, but doesn't point to a wide moat.

What's changing

Revenue growth slowed to 0.7%, essentially flat. This is a business that needs a catalyst.

What deserves caution

At 27x earnings, the current multiple leaves limited room for execution misses or growth deceleration.

Valuation context

27.0x earnings, 17.1x FCF. Not cheap, the quality is already reflected in the price. Upside from here requires either margin expansion or growth re-acceleration, not just continuation.

Price History

+24.3%

Valuation & Multiples

Based on TTM earnings · Diluted shares

Market Cap£8.90B
EPS£0.51
P/E26.96
P/FCF17.06
EV/EBITDA8.36
FCF Yield5.9%
Div. Yield2.37%
Net Debt/FCF2.2x
52-Week Range
$12.06$18.23

Profitability & Returns

Revenue (TTM)

£3.58B

▲ +0.7% YoY

Net Income (TTM)

£336M

▼ -22.8% YoY

Op. Margin

16.66%

▲ +1.3pp YoY

ROIC

8.21%

▼ -0.5pp YoY

Cash Flow & Balance Sheet

FCF (TTM)

£522M

▲ +3.8% YoY

Op. Cash Flow (TTM)

£656M

▲ +4.6% YoY

Net Debt

£1.15B

Cash & Equiv.

£333M

3Y CAGR: -11.7%

3Y CAGR: +21.7%

Continue Research

Is Pearson plc Sponsored ADR (PSO) overvalued?

At a P/E of 27.0 and a price-to-free-cash-flow of 17.1, Pearson plc Sponsored ADR (PSO) trades below a two-stage DCF intrinsic value of about £38.69 per share, so at £18.23 the stock looks undervalued (112.3% 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, Pearson plc Sponsored ADR scores 64/100 on Intrinsiqq's quality scorecard (a solid business on these measures), weighing growth, margins, returns on capital, share count, and balance-sheet strength. It currently yields about 2.4%; see dividend safety for coverage and history. All figures are computed from company filings; read the full methodology, or see how the market compares in our US profitability statistics. This is analysis, not investment advice.

Frequently asked

What is Pearson plc Sponsored ADR's fair value?+

Intrinsiqq's two-stage DCF estimates an intrinsic value of about £38.69 per share for PSO, 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 £29.02. At today's £18.23, that puts the stock about 112.3% 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.

Is Pearson plc Sponsored ADR a high-quality business?+

Pearson plc Sponsored ADR scores 64 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 16.7% operating margin and a 8.2% 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 company filings, not opinion. Because valuation only means something relative to quality, the full metric-by-metric breakdown is on the quality scorecard.

Does Pearson plc Sponsored ADR (PSO) pay a dividend, and how much?+

Yes, Pearson plc Sponsored ADR pays a regular dividend of about £0.32 per share per year (typically in quarterly installments), a yield of roughly 2.4% at the current price. That is a payout ratio of about 62.8% of earnings, so the dividend is well covered. Pearson plc Sponsored ADR has grown the dividend at roughly 7.4% a year over the past few years. A low headline yield is not the same as a weak dividend: what matters is how well earnings and free cash flow cover the payout and whether it is growing, not the percentage alone. For PSO's full payout history, growth streak and dividend-safety score, see the dividends tab.

Is Pearson plc Sponsored ADR a good stock to buy right now?+

That depends on valuation and quality together, not either alone. PSO currently trades below its estimated intrinsic value and scores 64/100 on quality (solid). It also yields about 2.4%. 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 company filings, not investment advice.

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Data sourced from company filings and third-party price providers. Scores, valuations, and metrics are algorithmic estimates. This is not investment advice. See our Terms and Methodology.

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