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

NYSE:PSO • US7050151056

Current stock price

12.82 USD
+0.08 (+0.63%)
At close:
12.82 USD
0 (0%)
After Hours:

This PSO fundamental analysis includes valuation metrics, fair value assessment, financial health analysis, profitability trends, growth metrics and dividend sustainability analysis.

6

1. PSO Profitability Analysis

1.1 Basic Checks

  • PSO had positive earnings in the past year.
  • In the past year PSO had a positive cash flow from operations.
  • PSO had positive earnings in each of the past 5 years.
  • PSO had a positive operating cash flow in each of the past 5 years.
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

  • PSO's Return On Assets of 5.19% is fine compared to the rest of the industry. PSO outperforms 68.49% of its industry peers.
  • PSO has a better Return On Equity (9.18%) than 64.38% of its industry peers.
  • With a decent Return On Invested Capital value of 7.63%, PSO is doing good in the industry, outperforming 73.97% of the companies in the same industry.
Industry RankSector Rank
ROA 5.19%
ROE 9.18%
ROIC 7.63%
ROA(3y)N/A
ROA(5y)N/A
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)N/A
ROIC(5y)N/A
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 has a Profit Margin of 9.37%. This is in the better half of the industry: PSO outperforms 71.23% of its industry peers.
  • PSO's Profit Margin has been stable in the last couple of years.
  • PSO has a Operating Margin of 14.23%. This is in the better half of the industry: PSO outperforms 75.34% of its industry peers.
  • In the last couple of years the Operating Margin of PSO has grown nicely.
  • With a Gross Margin value of 52.00%, PSO perfoms like the industry average, outperforming 58.90% of the companies in the same industry.
  • 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 3Y23.24%
OM growth 5Y4.6%
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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5

2. PSO Health Analysis

2.1 Basic Checks

  • The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so PSO is destroying value.
  • There is no outstanding debt for PSO. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
PSO Yearly Shares OutstandingPSO Yearly Shares OutstandingYearly Shares Outstanding 2016 2017 2018 2019 2020 2021 2022 2023 2024 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 2B 4B 6B 8B 10B

2.2 Solvency

  • PSO has an Altman-Z score of 2.49. 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.
  • PSO has a better Altman-Z score (2.49) than 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.
  • Looking at the Debt to FCF ratio, with a value of 2.84, PSO is in the better half of the industry, outperforming 79.45% of the companies in the same industry.
  • PSO has a Debt/Equity ratio of 0.39. This is a healthy value indicating a solid balance between debt and equity.
  • PSO has a Debt to Equity ratio (0.39) which is comparable to the rest of the industry.
Industry RankSector Rank
Debt/Equity 0.39
Debt/FCF 2.84
Altman-Z 2.49
ROIC/WACC0.83
WACC9.21%
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

  • PSO has a Current Ratio of 2.00. 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 Current ratio, with a value of 2.00, PSO is in the better half of the industry, outperforming 73.97% of the companies in the same industry.
  • A Quick Ratio of 1.94 indicates that PSO should not have too much problems paying its short term obligations.
  • PSO has a better Quick ratio (1.94) than 73.97% of its industry peers.
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 1B 2B 3B 4B

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WACCDebt/EquityHow to determine the health of a companyAltman-Z scoreShow peers with great health

4

3. PSO Growth Analysis

3.1 Past

  • The Earnings Per Share has been growing slightly by 4.09% over the past year.
  • Measured over the past years, PSO shows a quite strong growth in Earnings Per Share. The EPS has been growing by 16.99% on average per year.
  • The Revenue has been growing slightly by 0.70% in the past year.
  • The Revenue has been growing slightly by 1.04% on average over the past years.
EPS 1Y (TTM)4.09%
EPS 3Y7.29%
EPS 5Y16.99%
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 4.36% on average per year.
EPS Next Y9.34%
EPS Next 2Y10.6%
EPS Next 3Y10.79%
EPS Next 5Y5.64%
Revenue Next Year4.01%
Revenue Next 2Y4.45%
Revenue Next 3Y4.26%
Revenue Next 5Y4.36%

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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6

4. PSO Valuation Analysis

4.1 Price/Earnings Ratio

  • With a Price/Earnings ratio of 14.57, PSO is valued correctly.
  • Based on the Price/Earnings ratio, PSO is valued a bit cheaper than 69.86% of the companies in the same industry.
  • PSO's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 25.23.
  • A Price/Forward Earnings ratio of 13.32 indicates a correct valuation of PSO.
  • Compared to the rest of the industry, the Price/Forward Earnings ratio of PSO indicates a somewhat cheap valuation: PSO is cheaper than 76.71% of the companies listed in the same industry.
  • PSO's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 22.42.
Industry RankSector Rank
PE 14.57
Fwd PE 13.32
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

  • PSO's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. PSO is cheaper than 65.75% of the companies in the same industry.
  • Based on the Price/Free Cash Flow ratio, PSO is valued cheaper than 82.19% of the companies in the same industry.
Industry RankSector Rank
P/FCF 11.55
EV/EBITDA 9.97
PSO Per share dataPSO EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 2 4 6

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)1.56
PEG (5Y)0.86
EPS Next 2Y10.6%
EPS Next 3Y10.79%

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Price/EarningsPrice/FCFFCF per shareEV/EBITDAPEG RATIOShow best valued peers

6

5. PSO Dividend Analysis

5.1 Amount

  • With a Yearly Dividend Yield of 2.61%, 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 1.89, PSO pays a bit more dividend than the S&P500 average.
Industry RankSector Rank
Dividend Yield 2.61%

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.
  • The dividend of PSO decreased in the last 3 years.
Dividend Growth(5Y)4%
Div Incr Years2
Div Non Decr Years2
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

  • PSO pays out 47.76% of its income as dividend. This is a bit on the high side, but may be sustainable.
  • PSO's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP47.76%
EPS Next 2Y10.6%
EPS Next 3Y10.79%
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 (3/23/2026, 4:15:00 PM)

After market: 12.82 0 (0%)

12.82

+0.08 (+0.63%)

Chartmill FA Rating
GICS IndustryGroupConsumer Services
GICS IndustryDiversified Consumer Services
Earnings (Last)02-27
Earnings (Next)05-01
Inst Owners88.52%
Inst Owner Change14.25%
Ins Owners0.27%
Ins Owner ChangeN/A
Market Cap8.06B
Revenue(TTM)3.58B
Net Income(TTM)335.00M
Analysts75
Price Target16.61 (29.56%)
Short Float %0.51%
Short Ratio2.77
Dividend
Industry RankSector Rank
Dividend Yield 2.61%
Yearly Dividend0.32
Dividend Growth(5Y)4%
DP47.76%
Div Incr Years2
Div Non Decr Years2
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)-1.56%
PT rev (3m)-2.28%
EPS NQ rev (1m)N/A
EPS NQ rev (3m)N/A
EPS NY rev (1m)-2.51%
EPS NY rev (3m)-2.13%
Revenue NQ rev (1m)N/A
Revenue NQ rev (3m)N/A
Revenue NY rev (1m)-0.53%
Revenue NY rev (3m)-0.84%
Valuation
Industry RankSector Rank
PE 14.57
Fwd PE 13.32
P/S 1.69
P/FCF 11.55
P/OCF 9.19
P/B 1.65
P/tB 9.44
EV/EBITDA 9.97
EPS(TTM)0.88
EY6.86%
EPS(NY)0.96
Fwd EY7.51%
FCF(TTM)1.11
FCFY8.66%
OCF(TTM)1.39
OCFY10.88%
SpS7.6
BVpS7.76
TBVpS1.36
PEG (NY)1.56
PEG (5Y)0.86
Graham Number12.39
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)N/A
ROA(5y)N/A
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexgc growth 3YN/A
ROICexgc growth 5YN/A
ROICexc growth 3YN/A
ROICexc growth 5YN/A
OM growth 3Y23.24%
OM growth 5Y4.6%
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 2.49
F-Score7
WACC9.21%
ROIC/WACC0.83
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 5Y16.99%
EPS Q2Q%10.99%
EPS Next Y9.34%
EPS Next 2Y10.6%
EPS Next 3Y10.79%
EPS Next 5Y5.64%
Revenue 1Y (TTM)0.7%
Revenue growth 3Y-2.35%
Revenue growth 5Y1.04%
Sales Q2Q%3.17%
Revenue Next Year4.01%
Revenue Next 2Y4.45%
Revenue Next 3Y4.26%
Revenue Next 5Y4.36%
EBIT growth 1Y-6.78%
EBIT growth 3Y20.35%
EBIT growth 5Y5.69%
EBIT Next Year43.29%
EBIT Next 3Y17.52%
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 6 / 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 5 / 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 9.34% in the next year.