MH Should I Buy
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McGraw Hill Inc is not a strong buy at this moment for a beginner, long-term investor. While the company has shown positive revenue growth and strong analyst support, the recent financial performance, including a significant drop in net income and EPS, raises concerns. Additionally, technical indicators do not suggest a clear upward trend, and there are no strong proprietary trading signals or recent influential trading activity to support immediate action.
The MACD is positive and expanding, indicating potential bullish momentum. However, RSI is neutral at 53.388, and the moving averages are bearish (SMA_200 > SMA_20 > SMA_5), suggesting a lack of strong upward momentum. The stock is trading below the pivot level of 14.057, with key support at 12.847 and resistance at 15.267.
Revenue growth of 4.24% YoY in Q3
Analyst upgrades with JPMorgan raising the price target to $22 and maintaining an Overweight rating.
Strong performance in Higher Education and expectations for growth in K-12 TAM rebound in FY27.
Significant drop in net income (-61.84% YoY) and EPS (-60.71% YoY) in Q3
Bearish moving averages and lack of strong technical momentum.
Uncertainty around AI's long-term impact on the business, as noted by analysts.
In Q3 2026, revenue increased by 4.24% YoY to $434.2 million, but net income dropped significantly by 61.84% YoY to -$20.2 million. EPS also fell by 60.71% YoY to -0.11. Gross margin improved slightly to 66.24%, up 0.59% YoY.
Analysts are generally positive on McGraw Hill, with JPMorgan and Morgan Stanley maintaining Overweight ratings and price targets of $22 and $21, respectively. However, Baird and BMO Capital lowered their price targets to $19, citing mixed performance in K-12 and leadership changes. UBS maintains a Neutral rating with a price target of $17.
