Scholastic Skyrockets 22.83%—What’s Fueling This Publishing Giant’s Rebound?

Summary
• Scholastic’s shares surged 22.83% intraday, breaking through a $26.47 price ceiling.
• The company reported 7% revenue growth, driven by the Hunger Games phenomenon and cost discipline.
• EBITDA guidance for fiscal 2026 rose to $160–170 million, signaling improved profitability.

Scholastic’s dramatic 22.83% rally has electrified the publishing sector, fueled by a blend of strategic restructuring, earnings outperformance, and a rebound in consumer demand. With a day range of $23.80–$27.02, the stock’s volatility underscores investor confidence in its pivot to entertainment and digital innovation.

Earnings Outperformance and Strategic Restructuring Ignite Optimism
Scholastic’s 22.83% surge stems from a combination of fiscal 2025 earnings outperformance and strategic repositioning. The company exceeded revenue and EBITDA guidance, driven by strong performance in its Children’s Book Publishing segment and cost controls. CEO Peter Warwick’s announcement of a new leadership team for the struggling Education Solutions division, coupled with the integration of 9 Story Media Group into its entertainment strategy, signaled a pivot toward high-growth areas. Additionally, the restructuring of its Children’s Book Group under Sasha Quinton has positioned Scholastic to leverage IP across formats, aligning with long-term growth narratives.

Publishing Sector Stabilizes as Scholastic Outpaces Peers
While Scholastic’s shares surged, the broader publishing sector showed mixed momentum. Pearson (PSO), the sector’s leader, edged up 0.34%, reflecting modest gains in educational publishing. Scholastic’s outperformance highlights its unique focus on entertainment and IP-driven growth, contrasting with peers reliant on traditional education markets. The company’s aggressive cost controls and strategic acquisitions have created a divergent trajectory, making it a standout in a sector grappling with declining print sales and digital disruption.

Options and ETFs for Capitalizing on Scholastic’s Volatility
• 200-day average: $21.19 (below current price); RSI: 49.25 (neutral); MACD: 0.54 (bullish divergence).
• Bollinger Bands: Current price ($26.47) exceeds upper band ($22.31), indicating overbought territory.

Scholastic’s short-term bullish momentum suggests a breakout trade. Key levels to monitor include the 200-day average at $21.19 (support) and the 52-week high of $34.18 (resistance). With RSI near neutrality and MACD divergence, the stock may test its upper Bollinger Band before consolidating.

Top Options Picks:
1. SCHL20250815C25 (Call, $25 strike, Aug 15):
• IV: 51.95% (moderate)
• Leverage: 11.81%
• Delta: 0.7062 (high sensitivity)
• Theta: -0.0273 (moderate decay)
• Gamma: 0.1011 (high sensitivity to price shifts)
• Turnover: $6,874
• Payoff (5% upside): $1.34 per contract
• This call option is ideal for capitalizing on short-term volatility, with high delta and gamma amplifying gains if the price breaks above $27.02.

2. SCHL20250919C30 (Call, $30 strike, Sep 19):
• IV: 40.87% (moderate)
• Leverage: 44.30%
• Delta: 0.2523 (moderate sensitivity)
• Theta: -0.0123 (low decay)
• Gamma: 0.0742 (moderate sensitivity)
• Turnover: $8,636
• Payoff (5% upside): $0.67 per contract
• This option balances time decay and leverage, offering exposure to a potential breakout above $30 while mitigating immediate theta erosion.

Aggressive bulls should consider SCHL20250815C25 into a test above $27.02, while hedgers may use SCHL20250919P25 to protect against pullbacks.

Backtest Scholastic Stock Performance
The backtest of the Schwab U.S. Large-Cap ETF (SCHL) after a 23% intraday surge shows favorable performance metrics, indicating the strategy's potential profitability. The 3-Day win rate is 55.36%, the 10-Day win rate is 53.08%, and the 30-Day win rate is 53.08%, suggesting that the ETF tends to perform well in the short term following the intraday surge. The maximum return during the backtest period was 1.13%, which occurred on day 56, further highlighting the strategy's potential for positive returns.

Act Now: Scholastic’s Breakout Could Define Its 2026 Trajectory
Scholastic’s 22.83% surge reflects a pivotal inflection point, driven by earnings resilience and strategic clarity. While the stock remains 18% below its 52-week high, the combination of strong EBITDA guidance and sector outperformance suggests a sustainable rally. Investors should watch for a breakdown below $23.80 (intraday low) or a breakout above $27.02 to validate momentum. With Pearson (PSO) up 0.34%, the publishing sector’s cautious optimism provides a tailwind. Act now: Position for a potential $34.18 test by buying SCHL20250815C25 or hedging with SCHL20250919P25.