Pearson Plc (PSON) Stock Recommendation | Score, Valuation, Technicals & Financial Trend

Score

Click here to find our call on this stock

Strong Sell

Sell

Hold

Buy

Strong Buy

Comparison

Company

Score

Quality

Valuation

Financial

Technical

Pearson Plc

Bloomsbury Publishing Plc

Wilmington plc

Merit Group Plc

Future Plc

Time Out Group Plc

Centaur Media Plc

The Quarto Group, Inc.

Why is Pearson Plc ?

Poor Management Efficiency with a low ROCE of 8.63%

The company has been able to generate a Return on Capital Employed (avg) of 8.63% signifying low profitability per unit of total capital (equity and debt)

The company is Net-Debt Free

Poor long term growth as Net Sales has grown by an annual rate of 1.04% over the last 5 years

With a growth in Operating Profit of 20.59%, the company declared Very Positive results in Dec 25

OPERATING CASH FLOW(Y) Highest at GBP 1,908 MM
RAW MATERIAL COST(Y) Fallen by -3.7% (YoY)
INVENTORY TURNOVER RATIO(HY) Highest at 24.53 times

With ROE of 9.21%, it has a expensive valuation with a 1.88 Price to Book Value

Over the past year, while the stock has generated a return of 5.78%, its profits have fallen by -22.8%

Underperformed the market in the last 1 year

The stock has generated a return of 5.78% in the last 1 year, much lower than market (FTSE 100) returns of 17.87%

Real-Time Research Report

Verdict Report

How much should you hold?

Overall Portfolio exposure to Pearson Plc should be less than 10%
Overall Portfolio exposure to Media & Entertainment should be less than 30%

(If sector exposure > 30%, please use optimiser tool to see which are the best stocks to hold in Media & Entertainment)

When to exit? - We will constantly monitor the company and suggest at the appropriate time to exit from the stock

Is Pearson Plc for you?

Medium Risk, Medium Return

Absolute

Risk Adjusted

Volatility

Pearson Plc

5.78%

0.81

23.44%

FTSE 100

17.87%

1.52

11.77%

Quality

Management Risk

Growth

Capital Structure

Quality grade scale :

Below Average, Average, Good, Excellent

Quality key factors

Factor

Value

Sales Growth (5y)

1.04%

EBIT Growth (5y)

17.42%

EBIT to Interest (avg)

5.02

Debt to EBITDA (avg)

0.19

Net Debt to Equity (avg)

0.12

Sales to Capital Employed (avg)

0.73

Tax Ratio

14.76%

Dividend Payout Ratio

48.99%

Pledged Shares

Institutional Holding

0.12%

ROCE (avg)

8.63%

ROE (avg)

8.28%

Valuation

Valuation Scorecard

Valuation grade scale :

Very Risky, Risky, Very Expensive, Expensive, Fair, Attractive, Very Attractive

Valuation Key Factors

Factor

Value

P/E Ratio

Industry P/E

Price to Book Value

1.88

EV to EBIT

14.90

EV to EBITDA

7.02

EV to Capital Employed

1.73

EV to Sales

2.12

PEG Ratio

Dividend Yield

263.59%

ROCE (Latest)

11.62%

ROE (Latest)

9.21%

Technicals

Technical key factors

Indicator

Weekly

Monthly

MACD

Mildly Bullish

Bearish

RSI

No Signal

Bullish

Bollinger Bands

Bearish

Moving Averages

Mildly Bearish (Daily)

KST

Bearish

Dow Theory

Mildly Bearish

OBV

Mildly Bullish

Technical Indicator Scale: Bearish, Mildly Bearish, Sideways, Mildly Bullish, Bullish Turned

Technical Movement

Analyse All Technical Factors

Financial Trend

Financial Trend Scorecard

Financial Trend scale:

Very Negative, Negative, Flat, Positive, Very Positive, Outstanding

8What is working for the Company

OPERATING CASH FLOW(Y)

Highest at GBP 1,908 MM

RAW MATERIAL COST(Y)

Fallen by -3.7% (YoY

INVENTORY TURNOVER RATIO(HY)

Highest at 24.53 times

NET SALES(Q)

Highest at GBP 1,855 MM

OPERATING PROFIT(Q)

Highest at GBP 602 MM

OPERATING PROFIT MARGIN(Q)

Highest at 32.45 %

-4What is not working for the Company

ROCE(HY)

Lowest at 8.72%

NET PROFIT(Q)

At GBP 171 MM has Fallen at -38.27%

Here's what is working for Pearson Plc

Operating Cash Flow

Highest at GBP 1,908 MM and Grown

In each year in the last three years

MOJO Watch

The company has generated higher cash revenues from business operations

Operating Cash Flows (GBP MM)

Net Sales

Highest at GBP 1,855 MM

in the last five periods

MOJO Watch

Near term sales trend is positive

Net Sales (GBP MM)

Operating Profit

Highest at GBP 602 MM

in the last five periods

MOJO Watch

Near term Operating Profit trend is positive

Operating Profit (GBP MM)

Operating Profit Margin

Highest at 32.45 %

in the last five periods

MOJO Watch

Company's profit margin has improved

Operating Profit to Sales

Inventory Turnover Ratio

Highest at 24.53 times

in the last five Semi-Annual periods

MOJO Watch

Company has been able to sell its inventory faster

Inventory Turnover Ratio

Raw Material Cost

Fallen by -3.7% (YoY)

MOJO Watch

The company's ability to pass on the cost of raw materials to customers has improved; this may lead to a rise in profit margin

Raw Material Cost as a percentage of Sales

Depreciation

Highest at GBP 327 MM

in the last five periods

MOJO Watch

The expenditure on assets done by the company may have gone into operation

Depreciation (GBP MM)

Depreciation

At GBP 327 MM has Grown at 34.02%

period on period (QoQ)

MOJO Watch

The expenditure on assets done by the company has gone into productive use which should positively reflect in the future sales

Depreciation (GBP MM)

Here's what is not working for Pearson Plc

Net Profit

At GBP 171 MM has Fallen at -38.27%

Year on Year (YoY)

MOJO Watch

Near term Net Profit trend is very negative

Net Profit (GBP MM)