PEARSON PLC (PES.DE) Stock Fundamental Analysis
Europe - Frankfurt Stock Exchange - FRA:PES - GB0006776081 - Common Stock
11.395 EUR
+0.03 (+0.26%)
PES gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 2 industry peers in the Diversified Consumer Services industry. PES has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. PES has a valuation in line with the averages, but on the other hand it scores bad on growth.
1. Profitability
1.1 Basic Checks
PES had positive earnings in the past year.
PES had a positive operating cash flow in the past year.
In the past 5 years PES has always been profitable.
In the past 5 years PES always reported a positive cash flow from operatings.
1.2 Ratios
With an excellent Return On Assets value of 7.08%, PES belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
With an excellent Return On Equity value of 12.29%, PES belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
PES's Return On Invested Capital of 8.65% is amongst the best of the industry. PES outperforms 100.00% of its industry peers.
The last Return On Invested Capital (8.65%) for PES is above the 3 year average (6.70%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.08% | ||
| ROE | 12.29% | ||
| ROIC | 8.65% |
ROA(3y)5.07%
ROA(5y)4.41%
ROE(3y)8.59%
ROE(5y)7.58%
ROIC(3y)6.7%
ROIC(5y)5.84%
1.3 Margins
The Profit Margin of PES (12.53%) is better than 100.00% of its industry peers.
In the last couple of years the Profit Margin of PES has grown nicely.
PES's Operating Margin of 15.77% is amongst the best of the industry. PES outperforms 100.00% of its industry peers.
PES's Operating Margin has improved in the last couple of years.
With a decent Gross Margin value of 51.45%, PES is doing good in the industry, outperforming 66.67% of the companies in the same industry.
In the last couple of years the Gross Margin of PES has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 15.77% | ||
| PM (TTM) | 12.53% | ||
| GM | 51.45% |
OM growth 3Y25.2%
OM growth 5Y6.89%
PM growth 3Y33.26%
PM growth 5Y12.36%
GM growth 3Y1.31%
GM growth 5Y-0.38%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), PES is destroying value.
PES has less shares outstanding than it did 1 year ago.
PES has less shares outstanding than it did 5 years ago.
PES has a worse debt/assets ratio than last year.
2.2 Solvency
PES has an Altman-Z score of 2.71. This is not the best score and indicates that PES is in the grey zone with still only limited risk for bankruptcy at the moment.
PES's Altman-Z score of 2.71 is amongst the best of the industry. PES outperforms 100.00% of its industry peers.
The Debt to FCF ratio of PES is 2.42, which is a good value as it means it would take PES, 2.42 years of fcf income to pay off all of its debts.
PES's Debt to FCF ratio of 2.42 is amongst the best of the industry. PES outperforms 100.00% of its industry peers.
PES has a Debt/Equity ratio of 0.40. This is a healthy value indicating a solid balance between debt and equity.
Looking at the Debt to Equity ratio, with a value of 0.40, PES belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.4 | ||
| Debt/FCF | 2.42 | ||
| Altman-Z | 2.71 |
ROIC/WACC0.74
WACC11.7%
2.3 Liquidity
A Current Ratio of 2.31 indicates that PES has no problem at all paying its short term obligations.
PES's Current ratio of 2.31 is amongst the best of the industry. PES outperforms 100.00% of its industry peers.
PES has a Quick Ratio of 2.24. This indicates that PES is financially healthy and has no problem in meeting its short term obligations.
With an excellent Quick ratio value of 2.24, PES belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.31 | ||
| Quick Ratio | 2.24 |
3. Growth
3.1 Past
PES shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 3.29%.
PES shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 1.15% yearly.
Looking at the last year, PES shows a decrease in Revenue. The Revenue has decreased by -0.82% in the last year.
The Revenue has been decreasing by -1.70% on average over the past years.
EPS 1Y (TTM)3.29%
EPS 3Y20.87%
EPS 5Y1.15%
EPS Q2Q%-5.47%
Revenue 1Y (TTM)-0.82%
Revenue growth 3Y1.19%
Revenue growth 5Y-1.7%
Sales Q2Q%-1.82%
3.2 Future
The Earnings Per Share is expected to grow by 7.68% on average over the next years.
Based on estimates for the next years, PES will show a small growth in Revenue. The Revenue will grow by 3.16% on average per year.
EPS Next Y2.86%
EPS Next 2Y6.9%
EPS Next 3Y8.3%
EPS Next 5Y7.68%
Revenue Next Year-0.16%
Revenue Next 2Y2.43%
Revenue Next 3Y3.08%
Revenue Next 5Y3.16%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
PES is valuated correctly with a Price/Earnings ratio of 16.76.
Based on the Price/Earnings ratio, PES is valued cheaply inside the industry as 100.00% of the companies are valued more expensively.
PES is valuated rather cheaply when we compare the Price/Earnings ratio to 26.29, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 14.24, the valuation of PES can be described as correct.
PES's Price/Forward Earnings ratio is rather cheap when compared to the industry. PES is cheaper than 100.00% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 23.51, PES is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.76 | ||
| Fwd PE | 14.24 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of PES indicates a rather cheap valuation: PES is cheaper than 100.00% of the companies listed in the same industry.
100.00% of the companies in the same industry are more expensive than PES, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 10.27 | ||
| EV/EBITDA | 9.65 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates PES does not grow enough to justify the current Price/Earnings ratio.
The excellent profitability rating of PES may justify a higher PE ratio.
PEG (NY)5.86
PEG (5Y)14.55
EPS Next 2Y6.9%
EPS Next 3Y8.3%
5. Dividend
5.1 Amount
PES has a Yearly Dividend Yield of 2.44%.
PES's Dividend Yield is comparable with the S&P500 average which is at 2.31.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.44% |
5.2 History
The dividend of PES has a limited annual growth rate of 4.00%.
Dividend Growth(5Y)4%
Div Incr Years4
Div Non Decr Years4
5.3 Sustainability
PES pays out 36.05% of its income as dividend. This is a sustainable payout ratio.
PES's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP36.05%
EPS Next 2Y6.9%
EPS Next 3Y8.3%
FRA:PES (11/28/2025, 7:00:00 PM)
11.395
+0.03 (+0.26%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryDiversified Consumer Services
Earnings (Last)
Earnings (Next)
Inst Owners77.62%
Inst Owner ChangeN/A
Ins Owners0.2%
Ins Owner ChangeN/A
Market Cap7.25B
Revenue(TTM)3.52B
Net Income(TTM)441.00M
Analysts68.57
Price Target14.65 (28.57%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.44% |
Yearly Dividend0.26
Dividend Growth(5Y)4%
DP36.05%
Div Incr Years4
Div Non Decr Years4
Ex-DateN/A
Surprises & Revisions
EPS beat(2)N/A
Avg EPS beat(2)N/A
Min EPS beat(2)N/A
Max EPS beat(2)N/A
EPS beat(4)N/A
Avg EPS beat(4)N/A
Min EPS beat(4)N/A
Max EPS beat(4)N/A
EPS beat(8)N/A
Avg EPS beat(8)N/A
EPS beat(12)N/A
Avg EPS beat(12)N/A
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)N/A
Avg Revenue beat(2)N/A
Min Revenue beat(2)N/A
Max Revenue beat(2)N/A
Revenue beat(4)N/A
Avg Revenue beat(4)N/A
Min Revenue beat(4)N/A
Max Revenue beat(4)N/A
Revenue beat(8)N/A
Avg Revenue beat(8)N/A
Revenue beat(12)N/A
Avg Revenue beat(12)N/A
Revenue beat(16)N/A
Avg Revenue beat(16)N/A
PT rev (1m)0.49%
PT rev (3m)-0.17%
EPS NQ rev (1m)N/A
EPS NQ rev (3m)N/A
EPS NY rev (1m)-0.57%
EPS NY rev (3m)-0.86%
Revenue NQ rev (1m)N/A
Revenue NQ rev (3m)N/A
Revenue NY rev (1m)0.17%
Revenue NY rev (3m)4.66%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.76 | ||
| Fwd PE | 14.24 | ||
| P/S | 1.8 | ||
| P/FCF | 10.27 | ||
| P/OCF | 8.51 | ||
| P/B | 1.76 | ||
| P/tB | 8.11 | ||
| EV/EBITDA | 9.65 |
EPS(TTM)0.68
EY5.97%
EPS(NY)0.8
Fwd EY7.02%
FCF(TTM)1.11
FCFY9.73%
OCF(TTM)1.34
OCFY11.76%
SpS6.34
BVpS6.46
TBVpS1.4
PEG (NY)5.86
PEG (5Y)14.55
Graham Number9.94
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.08% | ||
| ROE | 12.29% | ||
| ROCE | 10.65% | ||
| ROIC | 8.65% | ||
| ROICexc | 9.26% | ||
| ROICexgc | 21.92% | ||
| OM | 15.77% | ||
| PM (TTM) | 12.53% | ||
| GM | 51.45% | ||
| FCFM | 17.5% |
ROA(3y)5.07%
ROA(5y)4.41%
ROE(3y)8.59%
ROE(5y)7.58%
ROIC(3y)6.7%
ROIC(5y)5.84%
ROICexc(3y)7.48%
ROICexc(5y)7.31%
ROICexgc(3y)20.27%
ROICexgc(5y)22.68%
ROCE(3y)8.26%
ROCE(5y)7.2%
ROICexgc growth 3Y7.27%
ROICexgc growth 5Y10.63%
ROICexc growth 3Y17.53%
ROICexc growth 5Y6.81%
OM growth 3Y25.2%
OM growth 5Y6.89%
PM growth 3Y33.26%
PM growth 5Y12.36%
GM growth 3Y1.31%
GM growth 5Y-0.38%
F-Score8
Asset Turnover0.57
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.4 | ||
| Debt/FCF | 2.42 | ||
| Debt/EBITDA | 1.84 | ||
| Cap/Depr | 58.45% | ||
| Cap/Sales | 3.64% | ||
| Interest Coverage | 10.09 | ||
| Cash Conversion | 96.12% | ||
| Profit Quality | 139.68% | ||
| Current Ratio | 2.31 | ||
| Quick Ratio | 2.24 | ||
| Altman-Z | 2.71 |
F-Score8
WACC11.7%
ROIC/WACC0.74
Cap/Depr(3y)49.36%
Cap/Depr(5y)46.7%
Cap/Sales(3y)3.58%
Cap/Sales(5y)3.97%
Profit Quality(3y)103.3%
Profit Quality(5y)94.38%
High Growth Momentum
Growth
EPS 1Y (TTM)3.29%
EPS 3Y20.87%
EPS 5Y1.15%
EPS Q2Q%-5.47%
EPS Next Y2.86%
EPS Next 2Y6.9%
EPS Next 3Y8.3%
EPS Next 5Y7.68%
Revenue 1Y (TTM)-0.82%
Revenue growth 3Y1.19%
Revenue growth 5Y-1.7%
Sales Q2Q%-1.82%
Revenue Next Year-0.16%
Revenue Next 2Y2.43%
Revenue Next 3Y3.08%
Revenue Next 5Y3.16%
EBIT growth 1Y9.47%
EBIT growth 3Y26.69%
EBIT growth 5Y5.08%
EBIT Next Year39.42%
EBIT Next 3Y15.87%
EBIT Next 5Y14.86%
FCF growth 1Y133.33%
FCF growth 3Y49.68%
FCF growth 5Y23.37%
OCF growth 1Y82.8%
OCF growth 3Y24.36%
OCF growth 5Y11.19%
PEARSON PLC / PES.DE FAQ
What is the ChartMill fundamental rating of PEARSON PLC (PES.DE) stock?
ChartMill assigns a fundamental rating of 7 / 10 to PES.DE.
What is the valuation status for PES stock?
ChartMill assigns a valuation rating of 7 / 10 to PEARSON PLC (PES.DE). This can be considered as Undervalued.
Can you provide the profitability details for PEARSON PLC?
PEARSON PLC (PES.DE) has a profitability rating of 9 / 10.
What is the financial health of PEARSON PLC (PES.DE) stock?
The financial health rating of PEARSON PLC (PES.DE) is 8 / 10.
What is the expected EPS growth for PEARSON PLC (PES.DE) stock?
The Earnings per Share (EPS) of PEARSON PLC (PES.DE) is expected to grow by 2.86% in the next year.