PEARSON PLC (PES.DE) Stock Fundamental Analysis
Europe - Frankfurt Stock Exchange - FRA:PES - GB0006776081 - Common Stock
11.395 EUR
+0.03 (+0.26%)
PES gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 2 industry peers in the Diversified Consumer Services industry. PES has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. PES is valued correctly, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
PES had positive earnings in the past year.
PES had a positive operating cash flow in the past year.
Each year in the past 5 years PES has been profitable.
Each year in the past 5 years PES had a positive operating cash flow.
1.2 Ratios
PES has a Return On Assets of 7.08%. This is amongst the best in the industry. PES outperforms 100.00% of its industry peers.
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.
The Return On Invested Capital of PES (8.65%) is better than 100.00% of its industry peers.
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
Looking at the Profit Margin, with a value of 12.53%, PES belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
PES's Profit Margin has improved in the last couple of years.
PES has a better Operating Margin (15.77%) than 100.00% of its industry peers.
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.
In the last couple of years the Gross Margin of PES has remained more or less at the same level.
| 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.
PES has less shares outstanding than it did 1 year ago.
PES has less shares outstanding than it did 5 years ago.
PES has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 2.71 indicates that PES is not a great score, but indicates only limited risk for bankruptcy at the moment.
PES's Altman-Z score of 2.71 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.
The Debt to FCF ratio of PES (2.42) is better than 100.00% of its industry peers.
A Debt/Equity ratio of 0.40 indicates that PES is not too dependend on debt financing.
The Debt to Equity ratio of PES (0.40) is better than 100.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.4 | ||
| Debt/FCF | 2.42 | ||
| Altman-Z | 2.71 |
ROIC/WACC0.74
WACC11.7%
2.3 Liquidity
A Current Ratio of 2.31 indicates that PES has no problem at all paying its short term obligations.
Looking at the Current ratio, with a value of 2.31, PES belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
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.
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
PES shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 3.29%.
PES shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 1.15% yearly.
Looking at the last year, PES shows a decrease in Revenue. The Revenue has decreased by -0.82% in the last year.
Measured over the past years, PES shows a decrease in Revenue. The Revenue has been decreasing by -1.70% on average per year.
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 7.68% on average over the next years.
Based on estimates for the next years, PES will show a small growth in Revenue. The Revenue will grow by 3.16% on average per year.
EPS Next Y2.86%
EPS Next 2Y6.9%
EPS Next 3Y8.3%
EPS Next 5Y7.68%
Revenue Next Year-0.16%
Revenue Next 2Y2.43%
Revenue Next 3Y3.08%
Revenue Next 5Y3.16%
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 16.76, 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.
The average S&P500 Price/Earnings ratio is at 26.49. PES is valued slightly cheaper when compared to this.
The Price/Forward Earnings ratio is 14.24, which indicates a correct valuation of PES.
Based on the Price/Forward Earnings ratio, PES is valued cheaply inside the industry as 100.00% of the companies are valued more expensively.
The average S&P500 Price/Forward Earnings ratio is at 23.69. PES is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.76 | ||
| Fwd PE | 14.24 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, PES is valued cheaply inside the industry as 100.00% of the companies are valued more expensively.
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 | 10.27 | ||
| EV/EBITDA | 9.65 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The excellent profitability rating of PES may justify a higher PE ratio.
PEG (NY)5.86
PEG (5Y)14.55
EPS Next 2Y6.9%
EPS Next 3Y8.3%
5. Dividend
5.1 Amount
PES has a Yearly Dividend Yield of 2.44%. Purely for dividend investing, there may be better candidates out there.
Compared to an average S&P500 Dividend Yield of 2.31, PES has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.44% |
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.
PES's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP36.05%
EPS Next 2Y6.9%
EPS Next 3Y8.3%
FRA:PES (11/28/2025, 7:00:00 PM)
11.395
+0.03 (+0.26%)
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 Cap7.25B
Revenue(TTM)3.52B
Net Income(TTM)441.00M
Analysts68.57
Price Target14.65 (28.57%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.44% |
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)0.49%
PT rev (3m)-0.17%
EPS NQ rev (1m)N/A
EPS NQ rev (3m)N/A
EPS NY rev (1m)-0.57%
EPS NY rev (3m)-0.86%
Revenue NQ rev (1m)N/A
Revenue NQ rev (3m)N/A
Revenue NY rev (1m)0.17%
Revenue NY rev (3m)4.66%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.76 | ||
| Fwd PE | 14.24 | ||
| P/S | 1.8 | ||
| P/FCF | 10.27 | ||
| P/OCF | 8.51 | ||
| P/B | 1.76 | ||
| P/tB | 8.11 | ||
| EV/EBITDA | 9.65 |
EPS(TTM)0.68
EY5.97%
EPS(NY)0.8
Fwd EY7.02%
FCF(TTM)1.11
FCFY9.73%
OCF(TTM)1.34
OCFY11.76%
SpS6.34
BVpS6.46
TBVpS1.4
PEG (NY)5.86
PEG (5Y)14.55
Graham Number9.94
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
WACC11.7%
ROIC/WACC0.74
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 Y2.86%
EPS Next 2Y6.9%
EPS Next 3Y8.3%
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-0.16%
Revenue Next 2Y2.43%
Revenue Next 3Y3.08%
Revenue Next 5Y3.16%
EBIT growth 1Y9.47%
EBIT growth 3Y26.69%
EBIT growth 5Y5.08%
EBIT Next Year39.42%
EBIT Next 3Y15.87%
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 2.86% in the next year.