McGraw Hill, Inc.
McGraw Hill, Inc. Fundamental Analysis
McGraw Hill, Inc. (MH) shows moderate financial fundamentals with a PE ratio of -33.72, profit margin of -3.37%, and ROE of -13.36%. The company generates $2.2B in annual revenue with moderate year-over-year growth of 7.18%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of -2.0/100 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
ExcellentMH trades at attractive valuation levels.
Growth Score
ExcellentMH delivers strong and consistent growth momentum.
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 -33.72 times earnings. This suggests potential undervaluation.
PEG Ratio
When adjusting for growth, MH's PEG of 1.46 indicates fair valuation.
Price to Book
The market values McGraw Hill, Inc. at 3.10 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 0.47 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 $-3.37 as profit after all expenses.
Operating Margin
Core operations generate 14.72 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $-13.36 in profit for every $100 of shareholder equity.
ROA
McGraw Hill, Inc. generates $-1.26 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 $453.62M, showing steady but balanced cash generation.
Free Cash Flow
McGraw Hill, Inc. generates strong free cash flow of $329.84M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $1.73 in free cash annually.
FCF Yield
MH converts 13.21% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
-33.72
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
1.46
vs 25 benchmark
P/B Ratio
Price to book value ratio
3.10
vs 25 benchmark
P/S Ratio
Price to sales ratio
1.18
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
3.47
vs 25 benchmark
Current Ratio
Current assets to current liabilities
0.83
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
-0.13
vs 25 benchmark
ROA
Return on assets percentage
-0.01
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 | -33.72 | 22.72 | Better (Cheaper) |
| ROE | -13.36% | 1241.00% | Weak |
| Net Margin | -3.37% | -5258.00% (disorted) | Weak |
| Debt/Equity | 3.47 | 0.80 | Weak (High Leverage) |
| Current Ratio | 0.83 | 2.50 | Weak Liquidity |
| ROA | -1.26% | -196076.00% (disorted) | Weak |
MH outperforms its industry in 1 out of 6 key metrics, but lagging in ROE.
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
0.00%
Industry Style: Defensive, Dividend, Low Volatility
DecliningEPS CAGR
0.00%
Industry Style: Defensive, Dividend, Low Volatility
DecliningFCF CAGR
0.00%
Industry Style: Defensive, Dividend, Low Volatility
Declining