Scholastic Corporation (SCHL) AI Stock Analysis

Scholastic Corporation is a publisher and distributor of children's books and educational solutions operating across three main segments. Its Children's Book Publishing and Distribution business produces original series like Harry Potter, Hunger Games, Captain Underpants, and Dog Man, as well as licensed properties such as Peppa Pig and Pokemon. It also sells novelty items under the Klutz and Make Believe Ideas brands. In Education Solutions, Scholastic provides classroom magazines including Scholastic News, Storyworks, and Junior Scholastic, alongside digital resources and curriculum materials. The International segment distributes trade books, educational resources, and magazines through school-based clubs and fairs worldwide.

Over the past five fiscal years, Scholastic expanded revenue at a 4.0% CAGR, reaching $1.58B in FY2026 after revenue fell 2.7% from $1.63B in FY2025. Gross margin contracted to 52.7% in FY2026 from 55.8% in FY2025, while operating margin rose slightly to 1.6%. Net income rebounded to $56.7M in FY2026, up from net income of -$1.9M in FY2025, generating diluted EPS of $2.09. However, performance slowed in the latest quarter ending August 31, 2026, with quarterly revenue falling 3.9% year-over-year and quarterly earnings declining 23.5%. TTM operating margin sits at -39.6% against $1.57B in revenue.

As of August 31, 2026, Scholastic held $106.8M in cash and short-term investments alongside $509.7M in total debt, resulting in net debt of $402.9M. The company maintains a current ratio of 1.25 and a debt-to-equity ratio of 0.78 against $656.5M in shareholders' equity. In FY2026, operating cash flow was $50.9M, which funded $48.4M in capital expenditures to yield $2.5M in free cash flow. Capital allocation heavily favored share buybacks of $265.9M and dividends paid of $20.0M.

Scholastic trades at a trailing P/E of 26.5x and a forward P/E of 22.2x, both above the median of its US-listed Communication Services peers at 16.2x and 14.1x, respectively. Conversely, its EV/EBITDA of 5.0x and price-to-sales of 0.4x sit below peer medians of 10.0x and 0.8x. The stock trades at a price-to-book ratio of 0.9x. Over the past year, SCHL returned 35.1%, outperforming the S&P 500 (SPY) return of 16.8%, though its five-year return of 19.3% lags the benchmark's 83.0% gain.

Scholastic offers an annual forward dividend of $1.00 per share, representing a 2.66% dividend yield. The company has paid dividends for 19 consecutive years, delivering a 5.9% annualized five-year dividend growth rate. Dividends are distributed on a quarterly schedule, with an elevated payout ratio of 91.8%.

Wall Street coverage is limited, with 1 analyst rating SCHL as a Hold, and 0 Buy or Sell ratings. The mean price target of $38.50 implies a 2.2% upside from the last closing price of $37.67. For the current fiscal year ending May 31, 2027, consensus estimates project EPS of $1.41, representing a 24.6% decline, on revenue of $1.62B. Scholastic has exceeded EPS expectations in 3 of its last 4 quarters.

This page is an AI-written research summary of Scholastic Corporation (SCHL). The text was generated on October 30, 2026 from Quotelinks data as of October 16, 2026 (company profile, annual results, latest balance sheet, valuation, price performance and analyst estimates). An automatic check rejects any draft that contains a figure not found in that data. It is not investment advice; verify figures on the linked tabs before making decisions.

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