McGraw Hill, Inc. Fundamental Analysis
McGraw Hill, Inc. (MH) shows weak financial fundamentals with a PE ratio of 60.66, profit margin of 1.68%, and ROE of 5.48%. The company generates $2.2B in annual revenue with N/A year-over-year growth of N/A.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 15.0/100 based on profitability, valuation, growth, and balance sheet metrics. The F grade reflects weak fundamentals and significant financial concerns.
Fundamental Health Score
We analyze MH's fundamental strength across five key dimensions:
Efficiency Score
WeakMH struggles to generate sufficient returns from assets.
Valuation Score
ModerateMH shows balanced valuation metrics.
Growth Score
ModerateMH shows steady but slowing expansion.
Financial Health Score
WeakMH carries high financial risk with limited liquidity.
Profitability Score
WeakMH struggles to sustain strong margins.
Key Financial Metrics
Is MH Expensive or Cheap?
P/E Ratio
MH trades at 60.66 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, MH's PEG of 0.50 indicates potential undervaluation.
Price to Book
The market values McGraw Hill, Inc. at 2.65 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at -0.61 times EBITDA. This is generally considered low.
How Well Does MH Make Money?
Net Profit Margin
For every $100 in sales, McGraw Hill, Inc. keeps $1.68 as profit after all expenses.
Operating Margin
Core operations generate 15.02 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $5.48 in profit for every $100 of shareholder equity.
ROA
McGraw Hill, Inc. generates $0.64 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
McGraw Hill, Inc. produces operating cash flow of $345.12M, showing steady but balanced cash generation.
Free Cash Flow
McGraw Hill, Inc. produces free cash flow of $185.18M, offering steady but limited capital for shareholder returns and expansion.
FCF Per Share
Each share generates $0.97 in free cash annually.
FCF Yield
MH converts 8.78% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
60.66
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
0.50
vs 25 benchmark
P/B Ratio
Price to book value ratio
2.65
vs 25 benchmark
P/S Ratio
Price to sales ratio
0.95
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
3.64
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.77
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.05
vs 25 benchmark
ROA
Return on assets percentage
0.006
vs 25 benchmark
ROCE
Return on capital employed
0.07
vs 25 benchmark
How MH Stacks Against Its Sector Peers
| Metric | MH Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 60.66 | 19.89 | Worse (Expensive) |
| ROE | 5.48% | 782.00% | Weak |
| Net Margin | 1.68% | -3724.00% (disorted) | Weak |
| Debt/Equity | 3.64 | 0.77 | Weak (High Leverage) |
| Current Ratio | 0.77 | 2.28 | Weak Liquidity |
| ROA | 0.64% | 347.00% | Weak |
MH outperforms its industry in 0 out of 6 key metrics, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews McGraw Hill, Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
N/A
Industry Style: Defensive, Dividend, Low Volatility
EPS CAGR
N/A
Industry Style: Defensive, Dividend, Low Volatility
FCF CAGR
N/A
Industry Style: Defensive, Dividend, Low Volatility