PEARSON PLC (PES.DE) Stock Fundamental Analysis
Europe - Frankfurt Stock Exchange - FRA:PES - GB0006776081 - Common Stock
11.365 EUR
+0.09 (+0.8%)
Overall PES gets a fundamental rating of 7 out of 10. We evaluated PES against 3 industry peers in the Diversified Consumer Services industry. PES gets an excellent profitability rating and is at the same time showing great financial health properties. PES is valued quite cheap, but it does not seem to be growing. These ratings could make PES a good candidate for value investing.
1. Profitability
1.1 Basic Checks
In the past year PES was profitable.
PES had a positive operating cash flow in the past year.
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
PES has a better Return On Assets (7.08%) than 100.00% of its industry peers.
PES's Return On Equity of 12.29% is amongst the best of the industry. PES outperforms 100.00% of its industry peers.
The Return On Invested Capital of PES (8.65%) is better than 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
The Profit Margin of PES (12.53%) is better than 100.00% of its industry peers.
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.
In the last couple of years the Operating Margin of PES has grown nicely.
The Gross Margin of PES (51.45%) is better than 66.67% of its industry peers.
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.
The number of shares outstanding for PES has been reduced compared to 1 year ago.
Compared to 5 years ago, PES has less shares outstanding
Compared to 1 year ago, PES has a worse debt to assets ratio.
2.2 Solvency
PES has an Altman-Z score of 2.71. This is not the best score and indicates that PES is in the grey zone with still only limited risk for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 2.71, PES belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
The Debt to FCF ratio of PES is 2.42, which is a good value as it means it would take PES, 2.42 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 2.42, PES belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
PES has a Debt/Equity ratio of 0.40. This is a healthy value indicating a solid balance between debt and equity.
With an excellent Debt to Equity ratio value of 0.40, PES belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.4 | ||
| Debt/FCF | 2.42 | ||
| Altman-Z | 2.71 |
ROIC/WACC0.81
WACC10.72%
2.3 Liquidity
A Current Ratio of 2.31 indicates that PES has no problem at all paying its short term obligations.
PES has a Current ratio of 2.31. This is amongst the best in the industry. PES outperforms 100.00% of its industry peers.
A Quick Ratio of 2.24 indicates that PES has no problem at all paying its short term obligations.
PES's Quick ratio of 2.24 is amongst the best of the industry. PES outperforms 100.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.31 | ||
| Quick Ratio | 2.24 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 3.29% over the past year.
Measured over the past 5 years, PES shows a small growth in Earnings Per Share. The EPS has been growing by 1.15% on average per year.
PES shows a decrease in Revenue. In the last year, the revenue decreased by -0.82%.
PES shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -1.70% yearly.
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
Based on estimates for the next years, PES will show a small growth in Earnings Per Share. The EPS will grow by 7.68% on average per year.
PES is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.16% yearly.
EPS Next Y3.45%
EPS Next 2Y7.01%
EPS Next 3Y8.36%
EPS Next 5Y7.68%
Revenue Next Year-0.33%
Revenue Next 2Y2.35%
Revenue Next 3Y3.06%
Revenue Next 5Y3.16%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 16.71, which indicates a correct valuation of PES.
Compared to the rest of the industry, the Price/Earnings ratio of PES indicates a rather cheap valuation: PES is cheaper than 100.00% of the companies listed in the same industry.
PES's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 26.15.
With a Price/Forward Earnings ratio of 14.22, PES is valued correctly.
100.00% of the companies in the same industry are more expensive than PES, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 36.12, PES is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.71 | ||
| Fwd PE | 14.22 |
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.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of PES indicates a rather cheap valuation: PES is cheaper than 100.00% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 10.28 | ||
| EV/EBITDA | 9.65 |
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)4.84
PEG (5Y)14.51
EPS Next 2Y7.01%
EPS Next 3Y8.36%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.46%, PES has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 2.46, PES pays a better dividend. On top of this PES pays more dividend than 100.00% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.41, PES has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.46% |
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
36.05% of the earnings are spent on dividend by PES. This is a low number and sustainable payout ratio.
The dividend of PES is growing, but earnings are growing more, so the dividend growth is sustainable.
DP36.05%
EPS Next 2Y7.01%
EPS Next 3Y8.36%
FRA:PES (11/27/2025, 7:00:00 PM)
11.365
+0.09 (+0.8%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryDiversified Consumer Services
Earnings (Last)
Earnings (Next)
Inst Owners77.62%
Inst Owner ChangeN/A
Ins Owners0.2%
Ins Owner ChangeN/A
Market Cap7.23B
Revenue(TTM)3.52B
Net Income(TTM)441.00M
Analysts68.57
Price Target14.48 (27.41%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.46% |
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)0.1%
PT rev (3m)-1.15%
EPS NQ rev (1m)N/A
EPS NQ rev (3m)N/A
EPS NY rev (1m)-0.22%
EPS NY rev (3m)-0.29%
Revenue NQ rev (1m)N/A
Revenue NQ rev (3m)N/A
Revenue NY rev (1m)-0.14%
Revenue NY rev (3m)4.49%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.71 | ||
| Fwd PE | 14.22 | ||
| P/S | 1.8 | ||
| P/FCF | 10.28 | ||
| P/OCF | 8.51 | ||
| P/B | 1.76 | ||
| P/tB | 8.12 | ||
| EV/EBITDA | 9.65 |
EPS(TTM)0.68
EY5.98%
EPS(NY)0.8
Fwd EY7.03%
FCF(TTM)1.11
FCFY9.73%
OCF(TTM)1.34
OCFY11.75%
SpS6.32
BVpS6.44
TBVpS1.4
PEG (NY)4.84
PEG (5Y)14.51
Graham Number9.93
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%
ROICexgc growth 3Y7.27%
ROICexgc 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 | 2.71 |
F-Score8
WACC10.72%
ROIC/WACC0.81
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 Y3.45%
EPS Next 2Y7.01%
EPS Next 3Y8.36%
EPS Next 5Y7.68%
Revenue 1Y (TTM)-0.82%
Revenue growth 3Y1.19%
Revenue growth 5Y-1.7%
Sales Q2Q%-1.82%
Revenue Next Year-0.33%
Revenue Next 2Y2.35%
Revenue Next 3Y3.06%
Revenue Next 5Y3.16%
EBIT growth 1Y9.47%
EBIT growth 3Y26.69%
EBIT growth 5Y5.08%
EBIT Next Year36.45%
EBIT Next 3Y14.89%
EBIT Next 5Y14.86%
FCF growth 1Y133.33%
FCF growth 3Y49.68%
FCF growth 5Y23.37%
OCF growth 1Y82.8%
OCF growth 3Y24.36%
OCF growth 5Y11.19%
PEARSON PLC / PES.DE FAQ
What is the ChartMill fundamental rating of PEARSON PLC (PES.DE) stock?
ChartMill assigns a fundamental rating of 7 / 10 to PES.DE.
What is the valuation status for PES stock?
ChartMill assigns a valuation rating of 7 / 10 to PEARSON PLC (PES.DE). This can be considered as Undervalued.
Can you provide the profitability details for PEARSON PLC?
PEARSON PLC (PES.DE) has a profitability rating of 9 / 10.
What is the financial health of PEARSON PLC (PES.DE) stock?
The financial health rating of PEARSON PLC (PES.DE) is 8 / 10.
What is the expected EPS growth for PEARSON PLC (PES.DE) stock?
The Earnings per Share (EPS) of PEARSON PLC (PES.DE) is expected to grow by 3.45% in the next year.