Value
6.4/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 6.7 |
| P/S | 10.0 |
| EV/EBITDA | 3.0 |
| Fwd P/E | 7.0 |
| PEG | 5.5 |
- ▸Forward P/E: 17.9x
- ▸PEG: 1.38
SCHL · Why this verdict
Why Scholastic (SCHL) is rated BUY WAIT
Updated
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VerdictBUY WAIT
Overall score4.9/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Scholastic's earnings beat streak and imminent catalyst are offset by declining revenue, an elevated growth-adjusted valuation, and a notably negative risk-adjusted asymmetry ratio, consistent with a call to consider reducing the position.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Scholastic has beaten consensus EPS in 3 of its last 4 quarters, with an earnings catalyst in 19 days built on that beat streak. Edge rationale | The company should beat consensus again in its upcoming report on 2026-07-23. | →Stable |
| CounterRevenue is declining roughly 2% year over year, which could make it harder to sustain the beat streak on the top line even if EPS beats continue. | ||
Scholastic's revenue is declining roughly 2% year over year. Growth breakdown | Revenue growth should turn flat-to-positive within the next two reported quarters. | Tripped→Stable |
| CounterA modest 2% revenue decline is within normal variation for a seasonal publishing business and may not indicate a structural growth problem. | ||
Scholastic trades at a forward P/E of 17.4x with a PEG ratio of 1.61, a valuation that looks stretched given the declining revenue backdrop. Valuation breakdown | The PEG ratio should compress back toward 1.0 as either the multiple falls or growth accelerates. | →Stable |
| CounterExcellent cash conversion of 185% FCF/NI and a strong Piotroski F-Score of 7 out of 9 suggest underlying financial strength that could justify a premium multiple despite the higher PEG. | ||
The risk-adjusted asymmetry ratio is negative at -2.16, with the analyst target already reached and -24.9% implied upside against 11.5% downside, explaining the reduce-position stance. Warnings | The asymmetry ratio should turn positive as either price consolidates lower or analyst targets are revised upward. | ↓Deteriorating |
| CounterHigh short interest of 21% combined with an upcoming earnings beat catalyst could trigger a short squeeze that outpaces the negative fundamental asymmetry. | ||
Scholastic has beaten consensus EPS in 3 of its last 4 quarters, with an earnings catalyst in 19 days built on that beat streak.
→StableEdge rationale
- Expectation
- The company should beat consensus again in its upcoming report on 2026-07-23.
CounterRevenue is declining roughly 2% year over year, which could make it harder to sustain the beat streak on the top line even if EPS beats continue.
Scholastic's revenue is declining roughly 2% year over year.
Tripped→StableGrowth breakdown
- Expectation
- Revenue growth should turn flat-to-positive within the next two reported quarters.
CounterA modest 2% revenue decline is within normal variation for a seasonal publishing business and may not indicate a structural growth problem.
Scholastic trades at a forward P/E of 17.4x with a PEG ratio of 1.61, a valuation that looks stretched given the declining revenue backdrop.
→StableValuation breakdown
- Expectation
- The PEG ratio should compress back toward 1.0 as either the multiple falls or growth accelerates.
CounterExcellent cash conversion of 185% FCF/NI and a strong Piotroski F-Score of 7 out of 9 suggest underlying financial strength that could justify a premium multiple despite the higher PEG.
The risk-adjusted asymmetry ratio is negative at -2.16, with the analyst target already reached and -24.9% implied upside against 11.5% downside, explaining the reduce-position stance.
↓DeterioratingWarnings
- Expectation
- The asymmetry ratio should turn positive as either price consolidates lower or analyst targets are revised upward.
CounterHigh short interest of 21% combined with an upcoming earnings beat catalyst could trigger a short squeeze that outpaces the negative fundamental asymmetry.
Per-dimension breakdown
Quality
4.3/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 2.3 |
| ROA | 0.9 |
| Gross margin | 7.2 |
| Op margin | 0.0 |
| Net margin | 1.9 |
| Current ratio | 4.6 |
| FCF quality | 10.0 |
| Moat | 5.4 |
| Piotroski F | 6.7 |
- ▸Excellent cash conversion: 185% FCF/NI
- ▸No competitive moat
Growth
2.0/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 2.0 |
- ▸Declining revenue: -2%
Momentum
5.7/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 2.1 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 2.1 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
5.7/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 8.5 |
| Analyst rating | 5.0 |
| Price target | 3.6 |
- ▸LLM news sentiment: +0.70 (n=1)
Insider
6.4/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 9.3 |
| notable moves | 5.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
- ▸Institutions accumulating
Peer rank
4.0/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 6.7 |
| quality rank | 0.8 |
| growth rank | 1.7 |
Technical
5.4/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 4.0 |
| support resistance | 2.9 |
| 52w position | 9.3 |
Risk (lower is worse)
4.5/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 1.6 |
| days to cover | 5.8 |
| volatility | 5.8 |
| put call | 0.0 |
| implied vol | 2.6 |
| beta | 7.1 |
| debt equity | 8.5 |
- ▸High short interest: 17%
- ▸Elevated put/call: 4.00
- ▸High IV: 64%
Catalyst
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| dividend safety | 6.8 |
| news activity | 5.0 |
- ▸Strong earnings: 3B/1M
- ▸Earnings in 1 days
How the verdict was assembled
Engine trigger
Earnings in 1 day. Wait until post-earnings.
Engine technical detail
verdict_path:
L3:NEWS_BLOCK|ENTRY_STICKY:WITHIN_BANDPassed (6)
- MOMENTUM:5.7>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- ASYMMETRY:-2.6=NEGATIVE
- EARNINGS_PROXIMITY:1d<=7d
Warning (0)
none
Reward-to-Risk
-2.57
Upside
-23.0%
Downside
8.9%
Sizing output
STARTER
SetupRange Bound — RSI 42 mid-range, Bollinger mid-band
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — MCap $0.9B<$5B
Investment implication
A recent news event triggered an L3 news-block on the verdict path. Trigger: Earnings in 1 day. Wait until post-earnings. The 10-dimension scores remain Value at 6.4 (strongest), but ASYMMETRY:-2.6=NEGATIVE also fails — the news block is the proximate trigger, not the sole driver.
The strongest dimensions are Value at 6.4, Insider at 6.4, and Catalyst at 6.4; the weakest are Growth at 2.0, Peer rank at 4.0, and Quality at 4.3. The V9 engine flagged 2 failed gates, producing an asymmetric reward-to-risk of -2.57 and an engine sizing output of STARTER.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Earnings Catalyst With Beat Streak
Trip ifScholastic's EPS surprise falls below 0% in the report on 2026-07-23.
- P2Declining RevenueTripped
Trip ifRevenue growth falls below -8% YoY in a subsequent quarter.
- P3Elevated Valuation Vs Growth
Trip ifPEG ratio rises above 2.5 without a corresponding change in the growth outlook.
- P4Negative Asymmetry Caps Add
Trip ifThe risk-adjusted asymmetry ratio stays below -1.5 for 2 consecutive quarters.