Is Scholastic Corp. overvalued or undervalued?

As of 7 May 2025, the valuation grade for Scholastic Corp. has moved from expensive to very expensive, indicating a significant shift in its perceived market value. The company appears overvalued based on its current metrics, with a P/E ratio of 19, which is notably higher than peers such as Gannett Co., Inc. at 8.87 and DallasNews Corp. at 0.82. Additionally, Scholastic's EV to EBITDA stands at 6.97, which is lower than Gannett's 6.76 but considerably less favorable compared to Value Line, Inc.'s 36.85.
The company's financial ratios reflect concerning performance, with a ROCE of just 2.53% and a ROE of 3.74%. The Price to Book Value ratio of 0.70 suggests that the stock is trading below its book value, yet the overall valuation remains elevated. Notably, Scholastic's stock has underperformed over the past year, with a return of -39.39% compared to the S&P 500's 10.26%, reinforcing the notion that the stock is currently overvalued in the market.