McGraw Hill (NYSE:MH) Posts Quarterly Earnings Results, Beats Estimates By $0.05 EPS

McGraw Hill (NYSE:MH) issued its quarterly earnings data on Thursday. The company reported $0.75 earnings per share (EPS) for the quarter, topping the consensus estimate of $0.70 by $0.05, FiscalAI reports. McGraw Hill had a return on equity of 62.57% and a net margin of 4.38%. The business had revenue of $632.21 million during the quarter. During the same quarter in the prior year, the firm posted $1.40 earnings per share. The business’s quarterly revenue was down 5.5% on a year-over-year basis.

Here are the key takeaways from McGraw Hill’s conference call:

• Second-quarter revenue fell 5.5% year over year, with K-12 revenue down 9.6%, primarily reflecting weaker capture rates in select math markets. Management said first-half results were tracking to expectations and reaffirmed its full-year guidance.
• Higher Education continued to gain share, with first-half revenue up 4.5% and recurring revenue up 9.8%, despite flat-to-lower enrollment. Across the company, first-half recurring revenue grew 3.7% and digital revenue grew 5.6%.
• Management highlighted early momentum for its K-12 ELA program ahead of a multiyear adoption cycle, citing above-target win rates and strong feedback. California math pilots were up fourfold year over year, while the company acknowledged recent math-market weakness.
• McGraw Hill announced integrations that make its content available through Microsoft Copilot and Anthropic’s Claude for Teachers, alongside other AI initiatives. Management said adoption is growing but monetization models are still developing, with AI expected to contribute to revenue and profitability beginning in fiscal 2028.
• The company generated $190 million in operating cash flow in the first half, paid down another $50 million of debt, and ended the quarter at 3.2x net leverage. It reaffirmed expectations for approximately $400 million of unlevered free cash flow for fiscal 2027 and remains focused on reducing leverage.

McGraw Hill Price Performance

MH traded down $1.49 during trading on Thursday, reaching $11.27. The stock had a trading volume of 1,218,242 shares, compared to its average volume of 501,605. The stock has a 50 day moving average of $13.25 and a two-hundred day moving average of $12.62. The company has a quick ratio of 0.62, a current ratio of 0.78 and a debt-to-equity ratio of 3.25. The firm has a market capitalization of $2.16 billion, a price-to-earnings ratio of 4.98 and a beta of -0.82. McGraw Hill has a 1-year low of $8.94 and a 1-year high of $18.00.

Key Stories Impacting McGraw Hill

Here are the key news stories impacting McGraw Hill this week:

• Positive Sentiment: Adjusted EPS of $0.75 beat consensus estimates, while revenue of $632.2 million topped forecasts by about $2.9 million. Q2 earnings and revenue results
• Positive Sentiment: McGraw Hill partnered with Anthropic to make its licensed K–12 curriculum available to school customers through Claude for Teachers, adding an AI-enabled way to access its educational content. McGraw Hill-Anthropic partnership
• Neutral Sentiment: Fiscal 2027 revenue guidance of $2.12 billion–$2.18 billion brackets FactSet’s $2.15 billion estimate, suggesting the outlook is roughly in line with expectations. Fiscal 2027 revenue guidance
• Negative Sentiment: Results were weaker year over year: quarterly revenue fell 5.5%, and adjusted EPS declined from $1.40 to $0.75. Separately, GAAP EPS of $0.45 missed estimates by $0.03, which may have weighed on sentiment despite the adjusted earnings beat. GAAP earnings report

Institutional Trading of McGraw Hill

A number of hedge funds and other institutional investors have recently modified their holdings of MH. Legal & General Group Plc bought a new stake in shares of McGraw Hill in the 2nd quarter worth approximately $25,000. PNC Financial Services Group Inc. bought a new position in shares of McGraw Hill in the first quarter valued at $68,000. NewEdge Advisors LLC acquired a new stake in shares of McGraw Hill during the 1st quarter valued at $84,000. Susquehanna International Group LLP bought a new stake in shares of McGraw Hill during the 2nd quarter worth $147,000. Finally, State of Wyoming bought a new stake in shares of McGraw Hill during the 2nd quarter worth $154,000.

Analyst Upgrades and Downgrades

A number of research analysts have issued reports on MH shares. Morgan Stanley reduced their price target on McGraw Hill from $18.00 to $16.00 and set an “overweight” rating for the company in a research report on Friday, August 14th. Needham & Company LLC reissued a “buy” rating and set a $19.00 price target on shares of McGraw Hill in a report on Thursday, August 13th. Wall Street Zen upgraded shares of McGraw Hill from a “buy” rating to a “strong-buy” rating in a research note on Saturday, October 24th. BTIG Research reaffirmed a “buy” rating and issued a $17.00 price objective on shares of McGraw Hill in a report on Tuesday, September 22nd. Finally, BMO Capital Markets increased their target price on shares of McGraw Hill from $16.00 to $17.00 and gave the company an “outperform” rating in a research report on Friday, August 14th. One investment analyst has rated the stock with a Strong Buy rating, eight have issued a Buy rating, two have given a Hold rating and one has assigned a Sell rating to the company’s stock. Based on data from MarketBeat, McGraw Hill has an average rating of “Moderate Buy” and an average price target of $17.20.

McGraw Hill Company Profile

McGraw Hill was a diversified information and publishing company that operated across education, financial information and media. Its education business published textbooks, digital learning programs, assessment products and instructional resources for schools, colleges, universities and professional learners.

The company also owned Standard & Poor’s, which provided credit ratings, investment research, financial data and market indexes, including the S&P 500. Through these businesses, McGraw Hill served customers in the United States and international markets.

Founded in 1888 through the combination of publishing ventures established by James H.