Scholastic Stock Down Despite Analyst Initiation of Coverage with Buy Rating

Scholastic (SCHL) shares fell 1.2% after B. Riley initiated coverage with a "Buy" rating and $37 price target. The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Scholastic's shares are volatile and have had 19 moves greater than 5% over the last year. The company is up 18.9% since the beginning of the year, but still trading 21.6% below its 52-week high.

New York, NY – September 2, 2025 – Scholastic Corporation (NASDAQ: SCHL), the global children’s publishing, education, and media company, reported its financial results for the fiscal fourth quarter and full year ended May 31, 2025. The company reported adjusted EBITDA in line with its original guidance, delivering strong results despite macroeconomic pressures on school spending. Peter Warwick, President and Chief Executive Officer, commented on the performance, highlighting the company’s strategic initiatives and robust growth prospects.

The company's adjusted EBITDA for the fiscal year was $145.4 million, reflecting the benefits of the 9 Story Media Group acquisition and strong performance in the Children’s Book Publishing and Distribution and International segments. Revenues increased by 7% to $508.3 million, driven by higher revenues in Children’s Book Publishing and Distribution and the contribution of 9 Story Media Group. Operating income increased by 13% to $53.5 million, excluding one-time charges.

Scholastic's stock (SCHL) fell 1.2% after B. Riley initiated coverage with a "Buy" rating and a $37 price target. The stock market’s overreaction to news events often presents opportunities for investors to purchase high-quality stocks at lower prices. While the stock has been volatile, with 19 moves greater than 5% over the last year, it has seen an 18.9% increase since the beginning of the year. However, it remains 21.6% below its 52-week high.

The company is targeting significant growth in fiscal 2026, with adjusted EBITDA expected to reach $160 million to $170 million, reflecting strength in core businesses and cost-savings. Revenue growth is expected to be between 2% and 4% in fiscal 2026. The company is also focusing on repositioning the Education division for long-term growth and profitability.

Scholastic's strong balance sheet, with modest debt, and significant real estate assets position it well for future growth. The company has retained Newmark Group to identify investment partners for potential sale-leaseback transactions of its owned office and retail real estate in New York City and its owned distribution centers in Jefferson City, Missouri.

References:

[1] https://www.scholastic.com/newsroom/all-news/press-release/scholastic-reports-fourth-quarter-and-fiscal-2025-results0.html