PEARSON PLC-SPONSORED ADR (PSO) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:PSO - US7050151056 - ADR
12.46 USD
-0.45 (-3.49%)
12.46 USD
0 (0%)
We assign a fundamental rating of 6 out of 10 to PSO. PSO was compared to 76 industry peers in the Diversified Consumer Services industry. PSO scores excellent points on both the profitability and health parts. This is a solid base for a good stock. PSO is valued correctly, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
- In the past year PSO was profitable.
- In the past year PSO had a positive cash flow from operations.
- In the past 5 years PSO has always been profitable.
- Each year in the past 5 years PSO had a positive operating cash flow.
1.2 Ratios
- PSO has a Return On Assets of 7.08%. This is in the better half of the industry: PSO outperforms 71.05% of its industry peers.
- PSO's Return On Equity of 12.29% is fine compared to the rest of the industry. PSO outperforms 65.79% of its industry peers.
- PSO has a better Return On Invested Capital (8.65%) than 76.32% of its industry peers.
- PSO had an Average Return On Invested Capital over the past 3 years of 6.70%. This is below the industry average of 10.30%.
- The 3 year average ROIC (6.70%) for PSO 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
- The Profit Margin of PSO (12.53%) is better than 76.32% of its industry peers.
- PSO's Profit Margin has improved in the last couple of years.
- Looking at the Operating Margin, with a value of 15.77%, PSO is in the better half of the industry, outperforming 77.63% of the companies in the same industry.
- In the last couple of years the Operating Margin of PSO has grown nicely.
- PSO has a Gross Margin (51.45%) which is in line with its industry peers.
- In the last couple of years the Gross Margin of PSO 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
- PSO has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
- Compared to 1 year ago, PSO has less shares outstanding
- Compared to 5 years ago, PSO has less shares outstanding
- PSO has a worse debt/assets ratio than last year.
2.2 Solvency
- PSO has an Altman-Z score of 2.62. This is not the best score and indicates that PSO is in the grey zone with still only limited risk for bankruptcy at the moment.
- The Altman-Z score of PSO (2.62) is better than 68.42% of its industry peers.
- The Debt to FCF ratio of PSO is 2.42, which is a good value as it means it would take PSO, 2.42 years of fcf income to pay off all of its debts.
- The Debt to FCF ratio of PSO (2.42) is better than 77.63% of its industry peers.
- PSO has a Debt/Equity ratio of 0.40. This is a healthy value indicating a solid balance between debt and equity.
- PSO has a Debt to Equity ratio (0.40) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.4 | ||
| Debt/FCF | 2.42 | ||
| Altman-Z | 2.62 |
ROIC/WACC0.86
WACC10.01%
2.3 Liquidity
- A Current Ratio of 2.31 indicates that PSO has no problem at all paying its short term obligations.
- PSO's Current ratio of 2.31 is amongst the best of the industry. PSO outperforms 80.26% of its industry peers.
- PSO has a Quick Ratio of 2.24. This indicates that PSO is financially healthy and has no problem in meeting its short term obligations.
- Looking at the Quick ratio, with a value of 2.24, PSO belongs to the top of the industry, outperforming 80.26% of the companies in the same industry.
| 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.
- The Earnings Per Share has been growing slightly by 1.15% on average over the past years.
- Looking at the last year, PSO shows a decrease in Revenue. The Revenue has decreased by -0.82% in the last year.
- PSO shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -1.70% yearly.
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
- PSO is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 7.15% yearly.
- PSO is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 2.66% yearly.
EPS Next Y2.77%
EPS Next 2Y7.05%
EPS Next 3Y8.32%
EPS Next 5Y7.15%
Revenue Next Year-0.14%
Revenue Next 2Y2.5%
Revenue Next 3Y3.12%
Revenue Next 5Y2.66%
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
- The Price/Earnings ratio is 14.83, which indicates a correct valuation of PSO.
- PSO's Price/Earnings ratio is a bit cheaper when compared to the industry. PSO is cheaper than 72.37% of the companies in the same industry.
- The average S&P500 Price/Earnings ratio is at 27.38. PSO is valued slightly cheaper when compared to this.
- Based on the Price/Forward Earnings ratio of 12.60, the valuation of PSO can be described as correct.
- 80.26% of the companies in the same industry are more expensive than PSO, based on the Price/Forward Earnings ratio.
- PSO is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 24.29, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.83 | ||
| Fwd PE | 12.6 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, PSO is valued a bit cheaper than the industry average as 69.74% of the companies are valued more expensively.
- Compared to the rest of the industry, the Price/Free Cash Flow ratio of PSO indicates a rather cheap valuation: PSO is cheaper than 90.79% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 9.61 | ||
| EV/EBITDA | 9.12 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
- The decent profitability rating of PSO may justify a higher PE ratio.
PEG (NY)5.35
PEG (5Y)12.88
EPS Next 2Y7.05%
EPS Next 3Y8.32%
5. Dividend
5.1 Amount
- PSO has a Yearly Dividend Yield of 2.49%.
- PSO's Dividend Yield is rather good when compared to the industry average which is at 0.35. PSO pays more dividend than 93.42% of the companies in the same industry.
- Compared to an average S&P500 Dividend Yield of 1.85, PSO pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.49% |
5.2 History
- The dividend of PSO has a limited annual growth rate of 4.00%.
- PSO has been paying a dividend for at least 10 years, so it has a reliable track record.
- PSO has decreased its dividend in the last 3 years.
Dividend Growth(5Y)4%
Div Incr Years2
Div Non Decr Years2
5.3 Sustainability
- 36.05% of the earnings are spent on dividend by PSO. This is a low number and sustainable payout ratio.
- PSO's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP36.05%
EPS Next 2Y7.05%
EPS Next 3Y8.32%
12.46
-0.45 (-3.49%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryDiversified Consumer Services
Earnings (Last)01-14 2026-01-14/amc
Earnings (Next)N/A N/A
Inst Owners79.26%
Inst Owner Change0.1%
Ins Owners0.2%
Ins Owner ChangeN/A
Market Cap7.93B
Revenue(TTM)3.52B
Net Income(TTM)441.00M
Analysts68.57
Price Target16.86 (35.31%)
Short Float %0.4%
Short Ratio3.5
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.49% |
Yearly Dividend0.32
Dividend Growth(5Y)4%
DP36.05%
Div Incr Years2
Div Non Decr Years2
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)-0.8%
PT rev (3m)-0.17%
EPS NQ rev (1m)N/A
EPS NQ rev (3m)N/A
EPS NY rev (1m)-0.08%
EPS NY rev (3m)-0.28%
Revenue NQ rev (1m)N/A
Revenue NQ rev (3m)N/A
Revenue NY rev (1m)0.03%
Revenue NY rev (3m)0.06%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.83 | ||
| Fwd PE | 12.6 | ||
| P/S | 1.68 | ||
| P/FCF | 9.61 | ||
| P/OCF | 7.95 | ||
| P/B | 1.65 | ||
| P/tB | 7.59 | ||
| EV/EBITDA | 9.12 |
EPS(TTM)0.84
EY6.74%
EPS(NY)0.99
Fwd EY7.93%
FCF(TTM)1.3
FCFY10.41%
OCF(TTM)1.57
OCFY12.57%
SpS7.41
BVpS7.56
TBVpS1.64
PEG (NY)5.35
PEG (5Y)12.88
Graham Number11.95
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 | 2.62 |
F-Score8
WACC10.01%
ROIC/WACC0.86
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 Y2.77%
EPS Next 2Y7.05%
EPS Next 3Y8.32%
EPS Next 5Y7.15%
Revenue 1Y (TTM)-0.82%
Revenue growth 3Y1.19%
Revenue growth 5Y-1.7%
Sales Q2Q%-1.82%
Revenue Next Year-0.14%
Revenue Next 2Y2.5%
Revenue Next 3Y3.12%
Revenue Next 5Y2.66%
EBIT growth 1Y9.47%
EBIT growth 3Y26.69%
EBIT growth 5Y5.08%
EBIT Next Year39.42%
EBIT Next 3Y15.89%
EBIT Next 5Y14.3%
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-SPONSORED ADR / PSO 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.
How profitable is PEARSON PLC-SPONSORED ADR (PSO) stock?
PEARSON PLC-SPONSORED ADR (PSO) has a profitability rating of 7 / 10.
Can you provide the financial health for PSO stock?
The financial health rating of PEARSON PLC-SPONSORED ADR (PSO) is 7 / 10.
Can you provide the expected EPS growth for PSO stock?
The Earnings per Share (EPS) of PEARSON PLC-SPONSORED ADR (PSO) is expected to grow by 2.77% in the next year.