McGraw Hill, Inc. (NYSE: MH)

Sector: Consumer Defensive Industry: Education & Training Services CIK: 0001951070
Market Cap 2.16 Bn
P/B 2.79
P/E -25.16
P/S 1.03
ROIC (Qtr) 0.00
Div Yield % 0.00
Rev 1y % (Qtr) 4.24
Total Debt (Qtr) 2.69 Bn
Debt/Equity (Qtr) 3.47
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About

Investment thesis

Bull case

  • Healthy cash reserves of 514.39M provide 23.57x coverage of short-term debt 21.82M, demonstrating strong liquidity position and minimal refinancing risk.
  • Cash reserves of 514.39M exceed inventory value of 169.67M by 3.03x, indicating strong liquidity and inventory management.
  • Cash reserves of 514.39M provide comfortable 31.37x coverage of tax obligations 16.40M, showing strong fiscal management.
  • Cash position of 514.39M fully covers payables of 113.13M by 4.55x, showing strong vendor relationship management.
  • Tangible assets of 1.55B provide robust 6.38x coverage of receivables 242.33M, showing strong asset quality.

Bear case

  • Operating cash flow of 0 provides insufficient coverage of deferred revenue obligations of 1.70B, which is 0x, raising concerns about future service delivery capabilities.
  • Tax assets of 7.14M provide limited offset against tax liabilities of 16.40M, which is 0.44x, indicating potential future cash flow pressure from tax obligations.
  • Tangible assets of 1.55B provide limited backing for working capital of (213.16M), which is -7.25x, suggesting increased operational risk in market downturns.
  • Other non-current assets of 338.60M provide minimal coverage for long-term debt of 2.67B, which is 0.13x, indicating potential asset-liability mismatch.
  • Deferred revenue of 1.70B represents 2.19x of shareholder equity 775.34M, indicating significant future service obligations relative to capital base.

Peer comparison

Companies in the Education & Training Services
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 EDU New Oriental Education & Technology Group Inc. 9.35 Bn 24.58 1.82 0.78 Bn
2 TAL TAL Education Group 6.18 Bn 22.22 2.20 0.38 Bn
3 GHC Graham Holdings Co 5.47 Bn 12.27 1.91 1.17 Bn
4 LAUR Laureate Education, Inc. 5.20 Bn 25.55 3.29 0.44 Bn
5 LOPE Grand Canyon Education, Inc. 4.62 Bn 21.85 4.23 0.11 Bn
6 LRN Stride, Inc. 3.61 Bn 11.32 1.43 0.56 Bn
7 ATGE Covista Inc. 3.46 Bn 13.66 1.83 0.73 Bn
8 PRDO PERDOCEO EDUCATION Corp 2.84 Bn 42.39 1.73 0.06 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.00 0.71
EV to Cash from Ops. EV to Cash from Ops. 0.00 6.80
EV to Debt EV to Debt 0.00 11.15
EV to EBIT EV to EBIT 0.00 112.78
EV to EBITDA EV to EBITDA 0.00 6.48
EV to Free Cash Flow [EV/FCF] EV to Free Cash Flow [EV/FCF] 0.00 5.57
EV to Market Cap EV to Market Cap 0.00 582,173.64
EV to Revenue EV to Revenue 0.00 1.74
Price to Book Value [P/B] P/B 2.79 -3.80
Price to Earnings [P/E] P/E -25.16 -1.70
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 11.73
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 2.21
Dividend per Basic Share Div per Share (Qtr) 0.00 0.25
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 1.69
Interest Coverage Int. cover (Qtr) 0.00 53.05
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 0.00 -82.12
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 0.00 25.11
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 0.54
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 0.00 -39.04
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 0.00 -34.79
EBIT Growth (1y) % EBIT 1y % (Qtr) 0.00 -40.70
EBT Growth (1y) % EBT 1y % (Qtr) 0.00 -52.53
EPS Growth (1y) % EPS 1y % (Qtr) 0.00 -29.51
FCF Growth (1y) % FCF 1y % (Qtr) 0.00 -36.51
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 0.00 -3.42
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.00 0.63
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.01
Cash Ratio Cash Ratio (Qtr) 0.40 0.73
Current Ratio Curr Ratio (Qtr) 0.83 1.63
Debt to Equity Ratio Debt/Equity (Qtr) 3.47 3.83
Interest Cover Ratio Int Coverage (Qtr) 0.00 53.05
Times Interest Earned Times Interest Earned (Qtr) 0.00 53.05
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 0.00 -30.62
EBIT Margin % EBIT Margin % (Qtr) 0.00 -82.13
EBT Margin % EBT Margin % (Qtr) 0.00 -47.07
Gross Margin % Gross Margin % (Qtr) 0.00 50.48
Net Profit Margin % Net Margin % (Qtr) 0.00 -48.61