Educational Development Corp (NASDAQ: EDUC)

Sector: Communication Services Industry: Publishing CIK: 0000031667
Market Cap 12.00 Mn
P/B 0.26
P/E 2.94
P/S 0.47
ROIC (Qtr) -7.58
Div Yield % 0.00
Rev 1y % (Qtr) -36.59
Total Debt (Qtr) 6.95 Mn
Debt/Equity (Qtr) 0.15
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About

Investment thesis

Bull case

  • Healthy cash reserves of 3.43M provide 2.24x coverage of short-term debt 1.53M, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of 2.44M provides strong 24.16x coverage of stock compensation 100900, indicating sustainable incentive practices.
  • Strong tangible asset base of 59.46M provides 8.56x coverage of total debt 6.95M, indicating robust asset backing and low credit risk.
  • Tangible assets of 59.46M provide exceptional 85.42x coverage of deferred revenue 696000, showing strong service capability backing.
  • Operating cash flow of 2.44M provides strong 3.50x coverage of deferred revenue 696000, indicating service delivery capability.

Bear case

  • Operating cash flow of 2.44M barely covers its investment activities of 29.35M, with a coverage ratio of 0.08, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • With cash reserves of 3.43M against inventory of 39.14M, the 0.09 cash-to-inventory ratio suggests potential liquidity risks if inventory turnover slows, particularly concerning given current supply chain volatilities.
  • Free cash flow of 31.79M provides weak coverage of capital expenditures of (29.35M), with a -1.08 ratio suggesting additional external financing needs for growth initiatives.
  • Operating cash flow of 2.44M provides minimal 1.33x coverage of tax expenses of 1.83M, suggesting potential tax planning inefficiencies or unsustainable tax positions.
  • Free cash flow of 31.79M represents just -1.01x of debt issuance (31.46M), suggesting concerning reliance on leverage rather than internal cash generation for growth.

Segments Breakdown of Revenue (2025)

Peer comparison

Companies in the Publishing
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 NYT New York Times Co 10.36 Bn -238.81 4.11 0.00 Mn
2 PSO Pearson Plc 8.41 Bn 13.92 1.74 -
3 WLY John Wiley & Sons, Inc. 1.73 Bn 13.05 1.06 964.63 Mn
4 SCHL Scholastic Corp 1.25 Bn 28.48 0.67 400.90 Mn
5 LEE LEE ENTERPRISES, Inc 0.04 Bn -1.63 0.08 479.84 Mn
6 EDUC Educational Development Corp 0.01 Bn 2.94 0.47 6.95 Mn
7 TNMG TNL Mediagene 0.00 Bn -0.04 0.07 -

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.70 1.30
EV to Cash from Ops. EV/CFO 17.02 24.67
EV to Debt EV to Debt 5.98 2.97
EV to EBIT EV/EBIT 5.27 149.23
EV to EBITDA EV/EBITDA -8.58 17.29
EV to Free Cash Flow [EV/FCF] EV/FCF 1.31 24.30
EV to Market Cap EV to Market Cap 3.46 3.67
EV to Revenue EV/Rev 1.64 1.80
Price to Book Value [P/B] P/B 0.26 3.94
Price to Earnings [P/E] P/E 2.94 -26.01
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.00 1.18
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 -34.74
Dividend per Basic Share Div per Share (Qtr) 0.00 0.46
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 26.60
Interest Coverage Int. cover (Qtr) 4.00 -0.64
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 6,704.28 954.28
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 6.37 8.48
Dividend Growth (1y) % Div 1y % (Qtr) 0.00 5.68
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 240.43 1,653.65
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 13.13 -147.25
EBIT Growth (1y) % EBIT 1y % (Qtr) 249.12 119.12
EBT Growth (1y) % EBT 1y % (Qtr) 178.44 79.49
EPS Growth (1y) % EPS 1y % (Qtr) 171.21 81.09
FCF Growth (1y) % FCF 1y % (Qtr) 2,068.75 652.20
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -32.86 -5.44
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.43 0.73
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.11
Cash Ratio Cash Ratio (Qtr) 0.42 0.23
Current Ratio Curr Ratio (Qtr) 3.40 1.53
Debt to Equity Ratio Debt/Equity (Qtr) 0.15 -1.00
Interest Cover Ratio Int Coverage (Qtr) 4.00 -0.64
Times Interest Earned Times Interest Earned (Qtr) 4.00 -0.64
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 36.80 -3.80
EBIT Margin % EBIT Margin % (Qtr) 31.06 -11.37
EBT Margin % EBT Margin % (Qtr) 23.31 -16.08
Gross Margin % Gross Margin % (Qtr) 59.70 55.09
Net Profit Margin % Net Margin % (Qtr) 16.10 -17.99