McGraw Hill (NYSE:MH) Announces Earnings Results, Beats Estimates By $0.23 EPS

McGraw Hill (NYSE:MH) released its earnings results on Wednesday. The company reported $0.28 earnings per share for the quarter, beating the consensus estimate of $0.05 by $0.23, Zacks reports. McGraw Hill’s quarterly revenue was up 4.2% on a year-over-year basis.

Here are the key takeaways from McGraw Hill’s conference call:

• Raised FY26 guidance after a strong Q3: revenue $434M (+4.2% YoY), recurring revenue +14.8% (82% of revenue), digital +11%, and Adjusted EBITDA $136M (+7.7%) with a 31.3% margin.
• Higher education momentum — HE revenue +24% to $225M, record ~30% market share, Evergreen now ~70% of HE revenue, and AI Reader surpassed 1M students while ALEKS for Calculus expands TAM.
• K‑12 revenue fell 14.6% to $128M despite share gains and wins (Florida ELA); management expects FY27 to improve as large state cycles (California, Florida, Texas) progress but near‑term comps remain tough.
• Strong cash generation and deleveraging — $309M operating cash flow in Q3, $514M cash / $964M liquidity, $596M of term‑loan prepayments YTD, and net leverage down to 2.9x with continued paydowns planned toward a 2.0–2.5x target.
• Accelerating AI product adoption and strategy — multiple AI offerings (Sharpen Advantage, Teacher/Writing Assistant, Clinical Reasoning, AI Reader) and a Morning Consult ranking underscore McGraw Hill’s push for personalized, institution‑level AI differentiation.

McGraw Hill Stock Down 0.9%

MH stock traded down $0.13 during mid-day trading on Friday, hitting $14.19. The company had a trading volume of 143,230 shares, compared to its average volume of 769,002. The firm’s 50-day moving average price is $15.45. McGraw Hill has a 12-month low of $10.69 and a 12-month high of $18.00. The company has a market capitalization of $2.71 billion and a P/E ratio of 10.12. The company has a quick ratio of 0.92, a current ratio of 1.01 and a debt-to-equity ratio of 3.52.

McGraw Hill News Roundup

Here are the key news stories impacting McGraw Hill this week:

• Positive Sentiment: Q3 earnings beat — McGraw Hill reported $0.28 EPS vs. a $0.05 consensus and revenue up ~4.2% YoY, beating expectations and underpinning the rally. MarketBeat Q3 Coverage
• Positive Sentiment: Management highlights recurring revenue strength — CFO Bob Sallmann emphasized recurring revenue is roughly 80% of the business and described the model as durable, supporting more predictable cash flow. CFO Interview
• Positive Sentiment: FY‑2026 revenue guidance raised — Company updated FY guidance pointing to about $2.1B in revenue versus ~ $2.0B consensus, signaling confidence in sales momentum (note: EPS guidance text in the release was incomplete). Press Release / Slide Deck
• Positive Sentiment: Analysts reaffirm buy ratings with higher targets — BTIG kept a Buy and $22 PT (large upside) and Needham reaffirmed Buy with a $19 PT, providing third‑party validation for the stock post‑earnings. BTIG / Analyst Note
• Positive Sentiment: Market reaction — Coverage noted an after‑hours surge (~19%) following results and guidance, reflecting investor enthusiasm. After‑Hours Coverage
• Positive Sentiment: Digital & AI strategy highlighted — Company and analysts called out strong digital subscription growth and strategic AI initiatives as drivers of longer‑term margin and revenue upside. Earnings Highlights
• Neutral Sentiment: Full earnings / call transcripts available for detail work — Transcripts and analyst writeups (Seeking Alpha, MSN, Zacks) provide the granular commentary and metrics investors will want to model. Earnings Call Transcript

Analysts Set New Price Targets

A number of research firms have recently weighed in on MH. Zacks Research cut McGraw Hill from a “strong-buy” rating to a “hold” rating in a research report on Monday, January 12th. Morgan Stanley raised their price objective on shares of McGraw Hill from $20.00 to $21.00 and gave the company an “overweight” rating in a research report on Wednesday, December 17th. UBS Group restated a “neutral” rating and set a $17.00 target price on shares of McGraw Hill in a research note on Thursday. Macquarie Infrastructure reiterated an “outperform” rating and issued a $19.00 price target on shares of McGraw Hill in a research note on Tuesday, January 13th. Finally, Robert W. Baird set a $19.00 price objective on McGraw Hill in a research report on Thursday. One equities research analyst has rated the stock with a Strong Buy rating, eleven have issued a Buy rating, two have assigned a Hold rating and one has issued a Sell rating to the company’s stock. According to MarketBeat.com, the company presently has an average rating of “Moderate Buy” and an average price target of $20.38.

Hedge Funds Weigh In On McGraw Hill

Hedge funds and other institutional investors have recently added to or reduced their stakes in the company. Ieq Capital LLC purchased a new position in McGraw Hill during the 4th quarter valued at approximately $389,000. Jane Street Group LLC purchased a new position in shares of McGraw Hill in the fourth quarter valued at $1,041,000. MetLife Investment Management LLC increased its position in McGraw Hill by 7.0% in the fourth quarter. MetLife Investment Management LLC now owns 15,404 shares of the company’s stock worth $254,000 after purchasing an additional 1,008 shares during the last quarter. Renaissance Technologies LLC bought a new stake in McGraw Hill in the fourth quarter worth $945,000. Finally, Federated Hermes Inc. purchased a new stake in McGraw Hill during the fourth quarter valued at $1,945,000.

About McGraw Hill

McGraw Hill (NYSE:MH) is a global learning science company specializing in educational content, digital learning platforms, and assessment solutions. The company offers textbooks and course materials for K-12 and higher education, along with professional development resources for corporate and workforce training. Its digital solutions—including adaptive learning platforms and analytics-driven tools—support personalized instruction, progress tracking, and interactive engagement in both classroom and remote environments.

Founded in 1888 in New York City, McGraw Hill has evolved from a technical periodical publisher into one of the world’s leading providers of educational content and technology.