4 models fit McGraw Hill Inc. Common Stock and they disagree: 0 of 4 land within 15% of the average.
Two or more of our models back this value.
Large discount(i)Silver68
Valued as a mature, profitable company: Discounted cash flow, P/E comparison, EV/EBITDA comparison, Graham number, and Dividend discount.
ACCE opinionMcGraw Hill Inc. Common Stock (MH)
Fair value (4 models)
$20.46
ACCE price target
$13.40
Rating
Undervalued
Horizon
12 months
Fair value published on 11 Oct 2026, 00:00 CEST; previously $22.70 since 7 Oct 2026, 00:00 CEST.
ACCE price target published on 11 Oct 2026, 00:00 CEST.
Rating published on 20 Oct 2026, 15:04 CEST.
Price used: $14.62 at the close on 23 Oct 2026, 22:00 CEST.
Models: Discounted cash flow, Dividend discount, EV/EBITDA comparison, Graham number, and P/E comparison.
Fair value: the average of the applicable valuation models (discounted cash flow, multiples, residual income, dividend discount, shareholder yield), each run on the latest financial statements and the market price shown. Opinion columns (fair value, target, rating) are shown apart from the data. Full methodology: acceinvestments.com/data/how-we-value-stocks
Conflicts of interest: The author holds no personal position in this security. General statement
Produced by ACCE Investments (acceinvestments.com)
Data
Price vs fair value
28.6% below
+40.0% to fair value
ACCE score
71
out of 100
Analysts
92% buy
13 covering
P/E
30.8x
forward 17.5x
1-year return
+15.8%
Dividend yield
0.00%
McGraw Hill Inc. Common Stock in four questions
Plain answers, details below
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Overview
ACCE thesis
McGraw Hill sells K-12 digital curriculum, assessment and learning platforms, including ALEKS and its Imagine Math and reading programs, along with higher-education course materials and professional certification and training. Its moat rests on embedded adoption: district contracts and course-adoption cycles are sticky, and an 81.7% gross margin says the content and software are doing most of the work. The near-term driver is the shift from printed to digital and subscription-based instructional materials, which supports a 2.6% revenue growth rate, modest but steady for a business with this margin profile. The stock looks more interesting on forward earnings, at 17.5 times against a trailing 29.6, which implies earnings are expected to rise sharply as amortization and one-time costs fade. A 21.5% operating margin and 17.3% return on equity support that view, though the 2.6% top-line growth means the case depends on margin expansion rather than volume, which is worth testing before going further.
⚠ Investor warnings · 3 flagsAI-assisted·How I use AI
high
Leverage well above norm
Debt/Equity of 3.64 and a 4.4% net margin leave little cushion if revenue growth of 2.6% YoY slows further. Position size should reflect a levered balance sheet.
moderate
Short interest elevated
Short interest sits at 10.8% of float, which means a meaningful group of holders is betting on the stock falling. Expect sharper moves in both directions.
moderate
Earnings growth not repeatable
Earnings rose 9860.2% YoY from a very small base, so the headline figure says little about durable profit growth. Judge the company on the 6.4% five-year revenue CAGR instead.
AI research notes
AI-assisted·How I use AIWritten Oct 24, 2026 · figures from 2026-06-30 · prices to Oct 23, 2026
Why it could do well
Free cash flow over the last 12 months reached $246M, a sizeable cash engine for a company priced at a modest multiple.
Last quarter's earnings per share beat expectations by 18.7%, with 0.57 reported against 0.48 expected.
Consensus model fair value of $20.46 sits well above the share price, and the price implies only +2.3% yearly cash flow growth.
Why it could disappoint
Return on invested capital of 0.9% is far too thin to justify the company's debt load of 3.64 debt to equity.
Revenue grew just +2.6% year over year, well below the +6.4% five-year average per year.
The trailing P/E of 30.8x is well above the forward P/E of 17.5x, and the sector median forward P/E is 18.6x, so earnings must improve for the stock to look cheap.
Each chip shows the exact figure and where it comes from. A claim without a source is not published.
Next results
Nov 5, 2026
We update the fair value about 2 days after the results, once the new figures are filed.Add to calendarGoogle
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Valuation
INVESTOR
Where MH's valuation models land
Price
$14.62
Model fair value
$20.46
Model range
$4.04 to $36.73
Fair value $20.46
Price $14.62
The price sits inside the model range.
Model
Fair value
Upside
Discounted cash flow
Dividend discount
EV/EBITDA comparison
Graham number
P/E comparison
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Quality
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