PEARSON PLC (PES.DE) Stock Fundamental Analysis
Europe - FRA:PES - GB0006776081 - Common Stock
12.035 EUR
-0.05 (-0.41%)
PES gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 3 industry peers in the Diversified Consumer Services industry. PES scores excellent points on both the profitability and health parts. This is a solid base for a good stock. PES has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
In the past year PES was profitable.
In the past year PES had a positive cash flow from operations.
PES had positive earnings in each of the past 5 years.
PES had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With an excellent Return On Assets value of 7.08%, PES belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
With an excellent Return On Equity value of 12.29%, PES belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
PES's Return On Invested Capital of 8.65% is amongst the best of the industry. PES outperforms 100.00% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for PES is in line with the industry average of 8.65%.
The 3 year average ROIC (6.70%) for PES is below the current ROIC(8.65%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.08% | ||
| ROE | 12.29% | ||
| ROIC | 8.65% |
ROA(3y)5.07%
ROA(5y)4.41%
ROE(3y)8.59%
ROE(5y)7.58%
ROIC(3y)6.7%
ROIC(5y)5.84%
1.3 Margins
With an excellent Profit Margin value of 12.53%, PES belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
In the last couple of years the Profit Margin of PES has grown nicely.
Looking at the Operating Margin, with a value of 15.77%, PES belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
PES's Operating Margin has improved in the last couple of years.
With a decent Gross Margin value of 51.45%, PES is doing good in the industry, outperforming 66.67% of the companies in the same industry.
PES's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 15.77% | ||
| PM (TTM) | 12.53% | ||
| GM | 51.45% |
OM growth 3Y25.2%
OM growth 5Y6.89%
PM growth 3Y33.26%
PM growth 5Y12.36%
GM growth 3Y1.31%
GM growth 5Y-0.38%
2. Health
2.1 Basic Checks
PES has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
Compared to 1 year ago, PES has less shares outstanding
PES has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, PES has a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 2.80 indicates that PES is not a great score, but indicates only limited risk for bankruptcy at the moment.
PES's Altman-Z score of 2.80 is amongst the best of the industry. PES outperforms 100.00% of its industry peers.
PES has a debt to FCF ratio of 2.42. This is a good value and a sign of high solvency as PES would need 2.42 years to pay back of all of its debts.
PES has a better Debt to FCF ratio (2.42) than 100.00% of its industry peers.
PES has a Debt/Equity ratio of 0.40. This is a healthy value indicating a solid balance between debt and equity.
PES has a better Debt to Equity ratio (0.40) than 100.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.4 | ||
| Debt/FCF | 2.42 | ||
| Altman-Z | 2.8 |
ROIC/WACC0.79
WACC10.89%
2.3 Liquidity
PES has a Current Ratio of 2.31. This indicates that PES is financially healthy and has no problem in meeting its short term obligations.
The Current ratio of PES (2.31) is better than 100.00% of its industry peers.
PES has a Quick Ratio of 2.24. This indicates that PES is financially healthy and has no problem in meeting its short term obligations.
Looking at the Quick ratio, with a value of 2.24, PES belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.31 | ||
| Quick Ratio | 2.24 |
3. Growth
3.1 Past
PES shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 3.29%.
The Earnings Per Share has been growing slightly by 1.15% on average over the past years.
PES shows a decrease in Revenue. In the last year, the revenue decreased by -0.82%.
The Revenue has been decreasing by -1.70% on average over the past years.
EPS 1Y (TTM)3.29%
EPS 3Y20.87%
EPS 5Y1.15%
EPS Q2Q%-5.47%
Revenue 1Y (TTM)-0.82%
Revenue growth 3Y1.19%
Revenue growth 5Y-1.7%
Sales Q2Q%-1.82%
3.2 Future
The Earnings Per Share is expected to grow by 8.47% on average over the next years. This is quite good.
The Revenue is expected to grow by 3.04% on average over the next years.
EPS Next Y3.75%
EPS Next 2Y7.48%
EPS Next 3Y8.47%
EPS Next 5YN/A
Revenue Next Year-0.19%
Revenue Next 2Y2.25%
Revenue Next 3Y3.04%
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 17.44, which indicates a rather expensive current valuation of PES.
Based on the Price/Earnings ratio, PES is valued cheaper than 100.00% of the companies in the same industry.
When comparing the Price/Earnings ratio of PES to the average of the S&P500 Index (27.30), we can say PES is valued slightly cheaper.
PES is valuated correctly with a Price/Forward Earnings ratio of 14.75.
PES's Price/Forward Earnings ratio is rather cheap when compared to the industry. PES is cheaper than 100.00% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.73, PES is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.44 | ||
| Fwd PE | 14.75 |
4.2 Price Multiples
PES's Enterprise Value to EBITDA ratio is rather cheap when compared to the industry. PES is cheaper than 100.00% of the companies in the same industry.
PES's Price/Free Cash Flow ratio is rather cheap when compared to the industry. PES is cheaper than 100.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 10.92 | ||
| EV/EBITDA | 10.16 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates PES does not grow enough to justify the current Price/Earnings ratio.
PES has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)4.65
PEG (5Y)15.14
EPS Next 2Y7.48%
EPS Next 3Y8.47%
5. Dividend
5.1 Amount
PES has a Yearly Dividend Yield of 2.32%.
PES's Dividend Yield is rather good when compared to the industry average which is at 2.32. PES pays more dividend than 100.00% of the companies in the same industry.
PES's Dividend Yield is comparable with the S&P500 average which is at 2.38.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.32% |
5.2 History
The dividend of PES has a limited annual growth rate of 4.00%.
Dividend Growth(5Y)4%
Div Incr Years4
Div Non Decr Years4
5.3 Sustainability
PES pays out 36.05% of its income as dividend. This is a sustainable payout ratio.
PES's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP36.05%
EPS Next 2Y7.48%
EPS Next 3Y8.47%
FRA:PES (9/10/2025, 7:00:00 PM)
12.035
-0.05 (-0.41%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryDiversified Consumer Services
Earnings (Last)
Earnings (Next)
Inst Owners76.58%
Inst Owner ChangeN/A
Ins Owners0.19%
Ins Owner ChangeN/A
Market Cap7.77B
Analysts68.57
Price Target14.6 (21.31%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.32% |
Yearly Dividend0.26
Dividend Growth(5Y)4%
DP36.05%
Div Incr Years4
Div Non Decr Years4
Ex-DateN/A
Surprises & Revisions
EPS beat(2)N/A
Avg EPS beat(2)N/A
Min EPS beat(2)N/A
Max EPS beat(2)N/A
EPS beat(4)N/A
Avg EPS beat(4)N/A
Min EPS beat(4)N/A
Max EPS beat(4)N/A
EPS beat(8)N/A
Avg EPS beat(8)N/A
EPS beat(12)N/A
Avg EPS beat(12)N/A
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)N/A
Avg Revenue beat(2)N/A
Min Revenue beat(2)N/A
Max Revenue beat(2)N/A
Revenue beat(4)N/A
Avg Revenue beat(4)N/A
Min Revenue beat(4)N/A
Max Revenue beat(4)N/A
Revenue beat(8)N/A
Avg Revenue beat(8)N/A
Revenue beat(12)N/A
Avg Revenue beat(12)N/A
Revenue beat(16)N/A
Avg Revenue beat(16)N/A
PT rev (1m)0.22%
PT rev (3m)-7.76%
EPS NQ rev (1m)N/A
EPS NQ rev (3m)N/A
EPS NY rev (1m)-5.28%
EPS NY rev (3m)-5.28%
Revenue NQ rev (1m)N/A
Revenue NQ rev (3m)N/A
Revenue NY rev (1m)-0.44%
Revenue NY rev (3m)-1.3%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.44 | ||
| Fwd PE | 14.75 | ||
| P/S | 1.91 | ||
| P/FCF | 10.92 | ||
| P/OCF | 9.04 | ||
| P/B | 1.87 | ||
| P/tB | 8.62 | ||
| EV/EBITDA | 10.16 |
EPS(TTM)0.69
EY5.73%
EPS(NY)0.82
Fwd EY6.78%
FCF(TTM)1.1
FCFY9.16%
OCF(TTM)1.33
OCFY11.06%
SpS6.3
BVpS6.42
TBVpS1.4
PEG (NY)4.65
PEG (5Y)15.14
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.08% | ||
| ROE | 12.29% | ||
| ROCE | 10.65% | ||
| ROIC | 8.65% | ||
| ROICexc | 9.26% | ||
| ROICexgc | 21.92% | ||
| OM | 15.77% | ||
| PM (TTM) | 12.53% | ||
| GM | 51.45% | ||
| FCFM | 17.5% |
ROA(3y)5.07%
ROA(5y)4.41%
ROE(3y)8.59%
ROE(5y)7.58%
ROIC(3y)6.7%
ROIC(5y)5.84%
ROICexc(3y)7.48%
ROICexc(5y)7.31%
ROICexgc(3y)20.27%
ROICexgc(5y)22.68%
ROCE(3y)8.26%
ROCE(5y)7.2%
ROICexcg growth 3Y7.27%
ROICexcg growth 5Y10.63%
ROICexc growth 3Y17.53%
ROICexc growth 5Y6.81%
OM growth 3Y25.2%
OM growth 5Y6.89%
PM growth 3Y33.26%
PM growth 5Y12.36%
GM growth 3Y1.31%
GM growth 5Y-0.38%
F-Score8
Asset Turnover0.57
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.4 | ||
| Debt/FCF | 2.42 | ||
| Debt/EBITDA | 1.84 | ||
| Cap/Depr | 58.45% | ||
| Cap/Sales | 3.64% | ||
| Interest Coverage | 10.09 | ||
| Cash Conversion | 96.12% | ||
| Profit Quality | 139.68% | ||
| Current Ratio | 2.31 | ||
| Quick Ratio | 2.24 | ||
| Altman-Z | 2.8 |
F-Score8
WACC10.89%
ROIC/WACC0.79
Cap/Depr(3y)49.36%
Cap/Depr(5y)46.7%
Cap/Sales(3y)3.58%
Cap/Sales(5y)3.97%
Profit Quality(3y)103.3%
Profit Quality(5y)94.38%
High Growth Momentum
Growth
EPS 1Y (TTM)3.29%
EPS 3Y20.87%
EPS 5Y1.15%
EPS Q2Q%-5.47%
EPS Next Y3.75%
EPS Next 2Y7.48%
EPS Next 3Y8.47%
EPS Next 5YN/A
Revenue 1Y (TTM)-0.82%
Revenue growth 3Y1.19%
Revenue growth 5Y-1.7%
Sales Q2Q%-1.82%
Revenue Next Year-0.19%
Revenue Next 2Y2.25%
Revenue Next 3Y3.04%
Revenue Next 5YN/A
EBIT growth 1Y9.47%
EBIT growth 3Y26.69%
EBIT growth 5Y5.08%
EBIT Next Year38.58%
EBIT Next 3Y15.6%
EBIT Next 5YN/A
FCF growth 1Y133.33%
FCF growth 3Y49.68%
FCF growth 5Y23.37%
OCF growth 1Y82.8%
OCF growth 3Y24.36%
OCF growth 5Y11.19%