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PSON

Pearson LSE:PSON Stock Report

Last Price

UK£7.62

Market Cap

UK£5.7b

7D

0.3%

1Y

-9.9%

Updated

18 May, 2022

Data

Company Financials +
PSON fundamental analysis
Snowflake Score
Valuation3/6
Future Growth3/6
Past Performance1/6
Financial Health6/6
Dividends1/6

PSON Stock Overview

Pearson plc provides educational courseware, assessments, and services in the United Kingdom, the United States, Canada, the Asia Pacific, other European countries, and internationally.

Pearson Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Pearson
Historical stock prices
Current Share PriceUK£7.62
52 Week HighUK£8.84
52 Week LowUK£5.71
Beta0.31
1 Month Change-1.30%
3 Month Change22.27%
1 Year Change-9.87%
3 Year Change-5.25%
5 Year Change9.80%
Change since IPO114.95%

Recent News & Updates

Shareholder Returns

PSONGB MediaGB Market
7D0.3%1.3%1.1%
1Y-9.9%-11.6%-2.5%

Return vs Industry: PSON matched the UK Media industry which returned -10% over the past year.

Return vs Market: PSON underperformed the UK Market which returned -2.5% over the past year.

Price Volatility

Is PSON's price volatile compared to industry and market?
PSON volatility
PSON Average Weekly Movement8.0%
Media Industry Average Movement7.1%
Market Average Movement6.1%
10% most volatile stocks in GB Market11.7%
10% least volatile stocks in GB Market3.2%

Stable Share Price: PSON is not significantly more volatile than the rest of UK stocks over the past 3 months, typically moving +/- 8% a week.

Volatility Over Time: PSON's weekly volatility (8%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
184421,350Andy Birdhttps://plc.pearson.com

Pearson plc provides educational courseware, assessments, and services in the United Kingdom, the United States, Canada, the Asia Pacific, other European countries, and internationally. It operates through five segments: Assessment & Qualifications, Virtual Learning, English Language Learning, Higher Education, and Workforce Skills. The Assessment & Qualifications segment offers Pearson VUE, US student assessment, clinical assessment, UK GCSE, and A levels and international academic qualifications.

Pearson Fundamentals Summary

How do Pearson's earnings and revenue compare to its market cap?
PSON fundamental statistics
Market CapUK£5.66b
Earnings (TTM)UK£159.00m
Revenue (TTM)UK£3.43b

35.6x

P/E Ratio

1.7x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
PSON income statement (TTM)
RevenueUK£3.43b
Cost of RevenueUK£1.75b
Gross ProfitUK£1.68b
Other ExpensesUK£1.52b
EarningsUK£159.00m

Last Reported Earnings

Dec 31, 2021

Next Earnings Date

n/a

Earnings per share (EPS)0.21
Gross Margin49.04%
Net Profit Margin4.64%
Debt/Equity Ratio18.7%

How did PSON perform over the long term?

See historical performance and comparison

Dividends

2.7%

Current Dividend Yield

97%

Payout Ratio

Valuation

Is Pearson undervalued compared to its fair value and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

  • Below Fair Value

  • Significantly Below Fair Value

  • PE vs Industry

  • PE vs Market

  • PEG Ratio

  • PB vs Industry


>50%

Undervalued compared to fair value

Share Price vs. Fair Value

Below Fair Value: PSON (£7.62) is trading below our estimate of fair value (£16.45)

Significantly Below Fair Value: PSON is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: PSON is poor value based on its PE Ratio (35.6x) compared to the UK Media industry average (25.6x).

PE vs Market: PSON is poor value based on its PE Ratio (35.6x) compared to the UK market (15.3x).


Price to Earnings Growth Ratio

PEG Ratio: PSON is poor value based on its PEG Ratio (2.1x)


Price to Book Ratio

PB vs Industry: PSON is good value based on its PB Ratio (1.3x) compared to the GB Media industry average (2x).


Future Growth

How is Pearson forecast to perform in the next 1 to 3 years based on estimates from 13 analysts?

Future Growth Score

3/6

Future Growth Score 3/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


17.0%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: PSON's forecast earnings growth (17% per year) is above the savings rate (0.9%).

Earnings vs Market: PSON's earnings (17% per year) are forecast to grow faster than the UK market (11.1% per year).

High Growth Earnings: PSON's earnings are forecast to grow, but not significantly.

Revenue vs Market: PSON's revenue (5.4% per year) is forecast to grow faster than the UK market (4.1% per year).

High Growth Revenue: PSON's revenue (5.4% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: PSON's Return on Equity is forecast to be low in 3 years time (8.5%).


Past Performance

How has Pearson performed over the past 5 years?

Past Performance Score

1/6

Past Performance Score 1/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


54.4%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: PSON has a large one-off loss of £149.0M impacting its December 31 2021 financial results.

Growing Profit Margin: PSON's current net profit margins (4.6%) are lower than last year (9.1%).


Past Earnings Growth Analysis

Earnings Trend: PSON has become profitable over the past 5 years, growing earnings by 54.4% per year.

Accelerating Growth: PSON's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: PSON had negative earnings growth (-48.7%) over the past year, making it difficult to compare to the Media industry average (61.7%).


Return on Equity

High ROE: PSON's Return on Equity (3.7%) is considered low.


Financial Health

How is Pearson's financial position?

Financial Health Score

6/6

Financial Health Score 6/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • Debt Coverage

  • Interest Coverage

Financial Position Analysis

Short Term Liabilities: PSON's short term assets (£3.2B) exceed its short term liabilities (£1.6B).

Long Term Liabilities: PSON's short term assets (£3.2B) exceed its long term liabilities (£1.5B).


Debt to Equity History and Analysis

Debt Level: PSON has more cash than its total debt.

Reducing Debt: PSON's debt to equity ratio has reduced from 62.6% to 18.7% over the past 5 years.

Debt Coverage: PSON's debt is well covered by operating cash flow (40.7%).

Interest Coverage: PSON's interest payments on its debt are well covered by EBIT (6x coverage).


Balance Sheet


Dividend

What is Pearson current dividend yield, its reliability and sustainability?

Dividend Score

2/6

Dividend Score 2/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Future Dividend Coverage


2.69%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: PSON's dividend (2.69%) is higher than the bottom 25% of dividend payers in the UK market (1.79%).

High Dividend: PSON's dividend (2.69%) is low compared to the top 25% of dividend payers in the UK market (4.82%).


Stability and Growth of Payments

Stable Dividend: PSON's dividend payments have been volatile in the past 10 years.

Growing Dividend: PSON's dividend payments have fallen over the past 10 years.


Earnings Payout to Shareholders

Earnings Coverage: With its high payout ratio (97.2%), PSON's dividend payments are not well covered by earnings.


Cash Payout to Shareholders

Cash Flow Coverage: With its high cash payout ratio (101.6%), PSON's dividend payments are not well covered by cash flows.


Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

2.1yrs

Average management tenure


CEO

Andy Bird (57 yo)

1.58yrs

Tenure

UK£7,106,000

Compensation

Mr. Adam Bird, also known as Andy, CBE, has been Chief Executive of Pearson plc since October 19, 2020. He served as President of Walt Disney International Operations of Walt Disney Co., an affiliate of Th...


CEO Compensation Analysis

Compensation vs Market: Andy's total compensation ($USD8.81M) is above average for companies of similar size in the UK market ($USD3.24M).

Compensation vs Earnings: Andy's compensation has increased by more than 20% whilst company earnings have fallen more than 20% in the past year.


Leadership Team

Experienced Management: PSON's management team is considered experienced (2.1 years average tenure).


Board Members

Experienced Board: PSON's board of directors are seasoned and experienced ( 14.5 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Pearson plc's employee growth, exchange listings and data sources


Key Information

  • Name: Pearson plc
  • Ticker: PSON
  • Exchange: LSE
  • Founded: 1844
  • Industry: Publishing
  • Sector: Media
  • Implied Market Cap: UK£5.663b
  • Shares outstanding: 743.23m
  • Website: https://plc.pearson.com

Number of Employees


Location

  • Pearson plc
  • 80 Strand
  • London
  • Greater London
  • WC2R 0RL
  • United Kingdom

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/05/18 00:00
End of Day Share Price2022/05/18 00:00
Earnings2021/12/31
Annual Earnings2021/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.