PEARSON PLC (PES.DE) Stock Fundamental Analysis
FRA:PES - GB0006776081 - Common Stock
12.035 EUR
-0.05 (-0.41%)
We assign a fundamental rating of 7 out of 10 to PES. PES was compared to 3 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 decent growth rate and is not valued too expensively.
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.
PES had positive earnings in each of the past 5 years.
PES had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
PES's Return On Assets of 7.08% is amongst the best of the industry. PES outperforms 100.00% of its industry peers.
The Return On Equity of PES (12.29%) is better than 100.00% of its industry peers.
The Return On Invested Capital of PES (8.65%) is better than 100.00% of its industry peers.
PES had an Average Return On Invested Capital over the past 3 years of 6.70%. This is in line with the industry average of 8.65%.
The 3 year average ROIC (6.70%) for PES is below the current ROIC(8.65%), indicating increased profibility in the last year.
| 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
PES has a Profit Margin of 12.53%. This is amongst the best in the industry. PES outperforms 100.00% of its industry peers.
PES's Profit Margin has improved in the last couple of years.
With an excellent Operating Margin value of 15.77%, PES belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
In the last couple of years the Operating Margin of PES has grown nicely.
The Gross Margin of PES (51.45%) is better than 66.67% of its industry peers.
PES's Gross Margin has been stable in the last couple of years.
| 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
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so 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.
Compared to 1 year ago, PES has a worse debt to assets ratio.
2.2 Solvency
PES has an Altman-Z score of 2.80. 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 2.80 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.
The Debt to FCF ratio of PES (2.42) is better than 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.
The Debt to Equity ratio of PES (0.40) is better than 100.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.4 | ||
| Debt/FCF | 2.42 | ||
| Altman-Z | 2.8 |
ROIC/WACC0.81
WACC10.7%
2.3 Liquidity
A Current Ratio of 2.31 indicates that PES has no problem at all paying its short term obligations.
PES has a Current ratio of 2.31. This is amongst the best in the industry. PES outperforms 100.00% of its industry peers.
A Quick Ratio of 2.24 indicates that PES has no problem at all paying its short term obligations.
The Quick ratio of PES (2.24) is better than 100.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.31 | ||
| Quick Ratio | 2.24 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 3.29% over the past year.
PES shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 1.15% yearly.
The Revenue has decreased by -0.82% in the past year.
Measured over the past years, PES shows a decrease in Revenue. The Revenue has been decreasing by -1.70% on average per year.
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
PES is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 8.47% yearly.
Based on estimates for the next years, PES will show a small growth in Revenue. The Revenue will grow by 1.19% on average per year.
EPS Next Y3.75%
EPS Next 2Y7.48%
EPS Next 3Y8.47%
EPS Next 5YN/A
Revenue Next Year-4.61%
Revenue Next 2Y2.33%
Revenue Next 3Y1.19%
Revenue Next 5YN/A
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 17.44 indicates a rather expensive valuation of PES.
PES's Price/Earnings ratio is rather cheap when compared to the industry. PES is cheaper than 100.00% of the companies in the same industry.
When comparing the Price/Earnings ratio of PES to the average of the S&P500 Index (27.03), we can say PES is valued slightly cheaper.
The Price/Forward Earnings ratio is 14.75, which indicates a correct valuation of PES.
100.00% of the companies in the same industry are more expensive than PES, based on the Price/Forward Earnings ratio.
PES is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 22.54, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.44 | ||
| Fwd PE | 14.75 |
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.
PES's Price/Free Cash Flow ratio is rather cheap when compared to the industry. PES is cheaper than 100.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 10.91 | ||
| EV/EBITDA | 10.16 |
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)4.65
PEG (5Y)15.14
EPS Next 2Y7.48%
EPS Next 3Y8.47%
5. Dividend
5.1 Amount
PES has a Yearly Dividend Yield of 2.30%.
PES's Dividend Yield is rather good when compared to the industry average which is at 2.30. PES pays more dividend than 100.00% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.45, PES has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.3% |
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 2Y7.48%
EPS Next 3Y8.47%
FRA:PES (9/10/2025, 7:00:00 PM)
12.035
-0.05 (-0.41%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryDiversified Consumer Services
Earnings (Last)
Earnings (Next)
Inst Owners76.58%
Inst Owner ChangeN/A
Ins Owners0.19%
Ins Owner ChangeN/A
Market Cap7.77B
Analysts68.57
Price Target14.67 (21.89%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.3% |
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)-4.89%
PT rev (3m)-7.69%
EPS NQ rev (1m)N/A
EPS NQ rev (3m)N/A
EPS NY rev (1m)-5.28%
EPS NY rev (3m)-5.28%
Revenue NQ rev (1m)N/A
Revenue NQ rev (3m)N/A
Revenue NY rev (1m)-4.85%
Revenue NY rev (3m)-5.68%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.44 | ||
| Fwd PE | 14.75 | ||
| P/S | 1.91 | ||
| P/FCF | 10.91 | ||
| P/OCF | 9.03 | ||
| P/B | 1.87 | ||
| P/tB | 8.62 | ||
| EV/EBITDA | 10.16 |
EPS(TTM)0.69
EY5.73%
EPS(NY)0.82
Fwd EY6.78%
FCF(TTM)1.1
FCFY9.16%
OCF(TTM)1.33
OCFY11.07%
SpS6.3
BVpS6.43
TBVpS1.4
PEG (NY)4.65
PEG (5Y)15.14
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%
ROICexcg growth 3Y7.27%
ROICexcg 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 | 2.8 |
F-Score8
WACC10.7%
ROIC/WACC0.81
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 Y3.75%
EPS Next 2Y7.48%
EPS Next 3Y8.47%
EPS Next 5YN/A
Revenue 1Y (TTM)-0.82%
Revenue growth 3Y1.19%
Revenue growth 5Y-1.7%
Sales Q2Q%-1.82%
Revenue Next Year-4.61%
Revenue Next 2Y2.33%
Revenue Next 3Y1.19%
Revenue Next 5YN/A
EBIT growth 1Y9.47%
EBIT growth 3Y26.69%
EBIT growth 5Y5.08%
EBIT Next Year38.58%
EBIT Next 3Y15.6%
EBIT Next 5YN/A
FCF growth 1Y133.33%
FCF growth 3Y49.68%
FCF growth 5Y23.37%
OCF growth 1Y82.8%
OCF growth 3Y24.36%
OCF growth 5Y11.19%