PEARSON PLC-SPONSORED ADR (PSO) Fundamental Analysis & Valuation

NYSE:PSO • US7050151056

Current stock price

15.08 USD
+0.4 (+2.72%)
At close:
15.08 USD
0 (0%)
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This PSO fundamental analysis includes valuation metrics, fair value assessment, financial health analysis, profitability trends, growth metrics and dividend sustainability analysis.

7

1. PSO Profitability Analysis

1.1 Basic Checks

  • In the past year PSO was profitable.
  • PSO had a positive operating cash flow in the past year.
  • Each year in the past 5 years PSO has been profitable.
  • In the past 5 years PSO always reported a positive cash flow from operatings.
PSO Yearly Net Income VS EBIT VS OCF VS FCFPSO Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0 500M -500M -1B -1.5B -2B

1.2 Ratios

  • The Return On Assets of PSO (5.19%) is better than 65.75% of its industry peers.
  • PSO has a Return On Equity of 9.18%. This is in the better half of the industry: PSO outperforms 61.64% of its industry peers.
  • PSO has a better Return On Invested Capital (7.63%) than 71.23% of its industry peers.
  • The Average Return On Invested Capital over the past 3 years for PSO is significantly below the industry average of 15.24%.
Industry RankSector Rank
ROA 5.19%
ROE 9.18%
ROIC 7.63%
ROA(3y)5.7%
ROA(5y)4.56%
ROE(3y)9.81%
ROE(5y)7.82%
ROIC(3y)8.31%
ROIC(5y)6.52%
PSO Yearly ROA, ROE, ROICPSO Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0 -20 -40

1.3 Margins

  • PSO's Profit Margin of 9.37% is fine compared to the rest of the industry. PSO outperforms 69.86% of its industry peers.
  • In the last couple of years the Profit Margin of PSO has remained more or less at the same level.
  • The Operating Margin of PSO (14.23%) is better than 73.97% of its industry peers.
  • PSO's Operating Margin has improved in the last couple of years.
  • PSO has a better Gross Margin (52.00%) than 60.27% of its industry peers.
  • In the last couple of years the Gross Margin of PSO has grown nicely.
Industry RankSector Rank
OM 14.23%
PM (TTM) 9.37%
GM 52%
OM growth 3Y31.33%
OM growth 5Y8.67%
PM growth 3Y14.13%
PM growth 5Y-0.73%
GM growth 3Y3.62%
GM growth 5Y1.62%
PSO Yearly Profit, Operating, Gross MarginsPSO Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0 20 -20 40 -40

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6

2. PSO Health Analysis

2.1 Basic Checks

  • PSO has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
  • PSO has less shares outstanding than it did 1 year ago.
  • The number of shares outstanding for PSO has been reduced compared to 5 years ago.
  • Compared to 1 year ago, PSO has a worse debt to assets ratio.
PSO Yearly Shares OutstandingPSO Yearly Shares OutstandingYearly Shares Outstanding 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 200M 400M 600M
PSO Yearly Total Debt VS Total AssetsPSO Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2B 4B 6B 8B 10B

2.2 Solvency

  • An Altman-Z score of 2.59 indicates that PSO is not a great score, but indicates only limited risk for bankruptcy at the moment.
  • PSO's Altman-Z score of 2.59 is fine compared to the rest of the industry. PSO outperforms 69.86% of its industry peers.
  • The Debt to FCF ratio of PSO is 2.84, which is a good value as it means it would take PSO, 2.84 years of fcf income to pay off all of its debts.
  • PSO's Debt to FCF ratio of 2.84 is fine compared to the rest of the industry. PSO outperforms 78.08% of its industry peers.
  • PSO has a Debt/Equity ratio of 0.39. This is a healthy value indicating a solid balance between debt and equity.
  • PSO's Debt to Equity ratio of 0.39 is in line compared to the rest of the industry. PSO outperforms 46.58% of its industry peers.
Industry RankSector Rank
Debt/Equity 0.39
Debt/FCF 2.84
Altman-Z 2.59
ROIC/WACC0.59
WACC13.01%
PSO Yearly LT Debt VS Equity VS FCFPSO Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 1B 2B 3B 4B

2.3 Liquidity

  • A Current Ratio of 2.00 indicates that PSO should not have too much problems paying its short term obligations.
  • With a decent Current ratio value of 2.00, PSO is doing good in the industry, outperforming 73.97% of the companies in the same industry.
  • PSO has a Quick Ratio of 1.94. This is a normal value and indicates that PSO is financially healthy and should not expect problems in meeting its short term obligations.
  • Looking at the Quick ratio, with a value of 1.94, PSO is in the better half of the industry, outperforming 73.97% of the companies in the same industry.
Industry RankSector Rank
Current Ratio 2
Quick Ratio 1.94
PSO Yearly Current Assets VS Current LiabilitesPSO Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 1B 2B 3B 4B

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4

3. PSO Growth Analysis

3.1 Past

  • PSO shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 4.09%.
  • PSO shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 17.66% yearly.
  • Looking at the last year, PSO shows a small growth in Revenue. The Revenue has grown by 0.70% in the last year.
  • Measured over the past years, PSO shows a small growth in Revenue. The Revenue has been growing by 1.04% on average per year.
EPS 1Y (TTM)4.09%
EPS 3Y7.29%
EPS 5Y17.66%
EPS Q2Q%10.99%
Revenue 1Y (TTM)0.7%
Revenue growth 3Y-2.35%
Revenue growth 5Y1.04%
Sales Q2Q%3.17%

3.2 Future

  • Based on estimates for the next years, PSO will show a small growth in Earnings Per Share. The EPS will grow by 5.64% on average per year.
  • Based on estimates for the next years, PSO will show a small growth in Revenue. The Revenue will grow by 4.12% on average per year.
EPS Next Y9.79%
EPS Next 2Y10.56%
EPS Next 3Y10.61%
EPS Next 5Y5.64%
Revenue Next Year3.38%
Revenue Next 2Y3.96%
Revenue Next 3Y4.26%
Revenue Next 5Y4.12%

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 decreasing.
  • The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
PSO Yearly Revenue VS EstimatesPSO Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 1B 2B 3B 4B
PSO Yearly EPS VS EstimatesPSO Yearly EPS VS EstimatesYearly EPS VS Estimates 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 0.2 0.4 0.6 0.8

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5

4. PSO Valuation Analysis

4.1 Price/Earnings Ratio

  • PSO is valuated correctly with a Price/Earnings ratio of 16.39.
  • Compared to the rest of the industry, the Price/Earnings ratio of PSO indicates a somewhat cheap valuation: PSO is cheaper than 63.01% of the companies listed in the same industry.
  • When comparing the Price/Earnings ratio of PSO to the average of the S&P500 Index (26.64), we can say PSO is valued slightly cheaper.
  • The Price/Forward Earnings ratio is 15.01, which indicates a correct valuation of PSO.
  • Based on the Price/Forward Earnings ratio, PSO is valued a bit cheaper than 71.23% of the companies in the same industry.
  • PSO is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 21.36, which is the current average of the S&P500 Index.
Industry RankSector Rank
PE 16.39
Fwd PE 15.01
PSO Price Earnings VS Forward Price EarningsPSO Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 5 10 15 20 25

4.2 Price Multiples

  • The rest of the industry has a similar Enterprise Value to EBITDA ratio as PSO.
  • Based on the Price/Free Cash Flow ratio, PSO is valued a bit cheaper than the industry average as 79.45% of the companies are valued more expensively.
Industry RankSector Rank
P/FCF 13.05
EV/EBITDA 10.86
PSO Per share dataPSO EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 2 4 6 8

4.3 Compensation for Growth

  • The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
  • The decent profitability rating of PSO may justify a higher PE ratio.
PEG (NY)1.67
PEG (5Y)0.93
EPS Next 2Y10.56%
EPS Next 3Y10.61%

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6

5. PSO Dividend Analysis

5.1 Amount

  • With a Yearly Dividend Yield of 2.33%, PSO has a reasonable but not impressive dividend return.
  • PSO's Dividend Yield is rather good when compared to the industry average which is at 0.45. PSO pays more dividend than 91.78% of the companies in the same industry.
  • Compared to an average S&P500 Dividend Yield of 1.80, PSO pays a bit more dividend than the S&P500 average.
Industry RankSector Rank
Dividend Yield 2.33%

5.2 History

  • The dividend of PSO has a limited annual growth rate of 5.26%.
  • PSO has been paying a dividend for at least 10 years, so it has a reliable track record.
  • PSO has not decreased its dividend in the last 3 years.
Dividend Growth(5Y)5.26%
Div Incr Years3
Div Non Decr Years3
PSO Yearly Dividends per sharePSO Yearly Dividends per shareYearly Dividends per share 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 0.2 0.4 0.6

5.3 Sustainability

  • 47.76% of the earnings are spent on dividend by PSO. This is a bit on the high side, but may be sustainable.
  • PSO's earnings are growing around the same pace than its dividend. As long as the earnings growth is kept the dividend growth is sustainable.
DP47.76%
EPS Next 2Y10.56%
EPS Next 3Y10.61%
PSO Yearly Income VS Free CF VS DividendPSO Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0 500M -500M -1B -1.5B -2B
PSO Dividend Payout.PSO Dividend Payout, showing the Payout Ratio.PSO Dividend Payout.PayoutRetained Earnings

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PSO Fundamentals: All Metrics, Ratios and Statistics

PEARSON PLC-SPONSORED ADR

NYSE:PSO (5/1/2026, 8:04:00 PM)

After market: 15.08 0 (0%)

15.08

+0.4 (+2.72%)

Chartmill FA Rating
GICS IndustryGroupConsumer Services
GICS IndustryDiversified Consumer Services
Industry StrengthN/A
Industry GrowthN/A
Earnings (Last)05-01
Earnings (Next)07-30
Inst Owners79.27%
Inst Owner Change0.11%
Ins Owners0.26%
Ins Owner ChangeN/A
Market Cap9.14B
Revenue(TTM)3.58B
Net Income(TTM)335.00M
Analysts75
Price Target16.05 (6.43%)
Short Float %0.59%
Short Ratio3.08
Dividend
Industry RankSector Rank
Dividend Yield 2.33%
Yearly Dividend0.36
Dividend Growth(5Y)5.26%
DP47.76%
Div Incr Years3
Div Non Decr Years3
Ex-Date03-20
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)-4.45%
PT rev (3m)-5.88%
EPS NQ rev (1m)N/A
EPS NQ rev (3m)N/A
EPS NY rev (1m)3.27%
EPS NY rev (3m)1.01%
Revenue NQ rev (1m)N/A
Revenue NQ rev (3m)N/A
Revenue NY rev (1m)-0.61%
Revenue NY rev (3m)-1.57%
Valuation
Industry RankSector Rank
PE 16.39
Fwd PE 15.01
P/S 1.9
P/FCF 13.05
P/OCF 10.38
P/B 1.87
P/tB 10.66
EV/EBITDA 10.86
EPS(TTM)0.92
EY6.1%
EPS(NY)1
Fwd EY6.66%
FCF(TTM)1.16
FCFY7.66%
OCF(TTM)1.45
OCFY9.63%
SpS7.92
BVpS8.08
TBVpS1.41
PEG (NY)1.67
PEG (5Y)0.93
Graham Number12.9305 (-14.25%)
Profitability
Industry RankSector Rank
ROA 5.19%
ROE 9.18%
ROCE 9.61%
ROIC 7.63%
ROICexc 8.14%
ROICexgc 20.67%
OM 14.23%
PM (TTM) 9.37%
GM 52%
FCFM 14.59%
ROA(3y)5.7%
ROA(5y)4.56%
ROE(3y)9.81%
ROE(5y)7.82%
ROIC(3y)8.31%
ROIC(5y)6.52%
ROICexc(3y)8.98%
ROICexc(5y)7.46%
ROICexgc(3y)23.28%
ROICexgc(5y)20.71%
ROCE(3y)10.47%
ROCE(5y)8.21%
ROICexgc growth 3Y19.51%
ROICexgc growth 5Y-5.02%
ROICexc growth 3Y26.46%
ROICexc growth 5Y3.47%
OM growth 3Y31.33%
OM growth 5Y8.67%
PM growth 3Y14.13%
PM growth 5Y-0.73%
GM growth 3Y3.62%
GM growth 5Y1.62%
F-Score7
Asset Turnover0.55
Health
Industry RankSector Rank
Debt/Equity 0.39
Debt/FCF 2.84
Debt/EBITDA 1.98
Cap/Depr 64.73%
Cap/Sales 3.75%
Interest Coverage 6.97
Cash Conversion 91.62%
Profit Quality 155.82%
Current Ratio 2
Quick Ratio 1.94
Altman-Z 2.59
F-Score7
WACC13.01%
ROIC/WACC0.59
Cap/Depr(3y)55.38%
Cap/Depr(5y)51.19%
Cap/Sales(3y)3.56%
Cap/Sales(5y)3.93%
Profit Quality(3y)125.76%
Profit Quality(5y)110.09%
High Growth Momentum
Growth
EPS 1Y (TTM)4.09%
EPS 3Y7.29%
EPS 5Y17.66%
EPS Q2Q%10.99%
EPS Next Y9.79%
EPS Next 2Y10.56%
EPS Next 3Y10.61%
EPS Next 5Y5.64%
Revenue 1Y (TTM)0.7%
Revenue growth 3Y-2.35%
Revenue growth 5Y1.04%
Sales Q2Q%3.17%
Revenue Next Year3.38%
Revenue Next 2Y3.96%
Revenue Next 3Y4.26%
Revenue Next 5Y4.12%
EBIT growth 1Y-6.78%
EBIT growth 3Y28.25%
EBIT growth 5Y9.8%
EBIT Next Year42.57%
EBIT Next 3Y17.28%
EBIT Next 5Y18.36%
FCF growth 1Y3.78%
FCF growth 3Y34.61%
FCF growth 5Y15.41%
OCF growth 1Y4.63%
OCF growth 3Y22.03%
OCF growth 5Y11.02%

PEARSON PLC-SPONSORED ADR / PSO Fundamental Analysis FAQ

What is the ChartMill fundamental rating of PEARSON PLC-SPONSORED ADR (PSO) stock?

ChartMill assigns a fundamental rating of 6 / 10 to PSO.


What is the valuation status for PSO stock?

ChartMill assigns a valuation rating of 5 / 10 to PEARSON PLC-SPONSORED ADR (PSO). This can be considered as Fairly Valued.


Can you provide the profitability details for PEARSON PLC-SPONSORED ADR?

PEARSON PLC-SPONSORED ADR (PSO) has a profitability rating of 7 / 10.


What is the earnings growth outlook for PEARSON PLC-SPONSORED ADR?

The Earnings per Share (EPS) of PEARSON PLC-SPONSORED ADR (PSO) is expected to grow by 9.79% in the next year.


How sustainable is the dividend of PEARSON PLC-SPONSORED ADR (PSO) stock?

The dividend rating of PEARSON PLC-SPONSORED ADR (PSO) is 6 / 10 and the dividend payout ratio is 47.76%.