SCHLScholastic Corporation
Is the business good?
The checks split: earnings fully cash-backed (3.9×), but margins compressing.
Operating profit is fully backed by cash. Conversion is worsening vs a year ago.
Operating margin has narrowed over the past few years, profitability per dollar of sales is eroding.
Where this answer is blind. The F-score rewards improvement, so an already-elite company can score mid-pack.
How good a business is SCHL?
Scholastic Corporation earns 1.7% on the capital it employs against a 9.0% cost of capital, so growth costs more than it returns.
Return on invested capital · cost of capital 9.0% · 7.3 points below what the capital costs: growth destroys value
- Operating margin
- 0.97%
Operating margin · Publishing median 15% · 12 months to Q1 2027
- Cash conversion
- 3.92×
Cash conversion · 8.82× a year ago · operating cash flow covers the operating profit after tax
- Share count, year on year
- −25%
Share count, year on year · bought back, each share owns more of the company
| Year | Operating margin |
|---|---|
| FY2021 | −1.8% |
| FY2022 | 5.9% |
| FY2023 | 6.2% |
| FY2024 | 0.91% |
| FY2025 | 0.97% |
| FY2026 | 0.96% |
Details›
- Gross margin12 months to Q1 2027
- 56%
- Operating margin12 months to Q1 2027
- 0.97%
- Net margin12 months to Q1 2027
- 3.6%
- Free cash flow margin
- −0.92%
- Revenue, trailing twelve months
- $1.57B
- Free cash flow, trailing twelve months
- −$14M
- Net income, trailing twelve months
- $57M
- Return on invested capitaloperating profit after tax ÷ debt + equity − cash
- 1.7%
Margins, capital and share counts from the statements as filed with the SEC; cash conversion is operating cash flow over operating profit after tax.