A Business at a Glance
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PEARSON PLC
PSO
$10.0B
Mkt Cap
$16.29
+1.56%
PEARSON PLC (PSO) has a current P/E ratio of 22.4, compared to its historical median P/E of 16.2. The stock is currently considered Expensive based on its historical valuation range.
PEARSON PLC (PSO) has a 5-year average return on invested capital (ROIC) of 6.4%. This is below average and may indicate limited pricing power.
PEARSON PLC (PSO) has a market capitalization of $10.0B. It is classified as a mid-cap stock.
Yes, PEARSON PLC (PSO) pays a dividend with a trailing twelve-month yield of 2.12%. The company also returns capital through share buybacks, with a buyback yield of 0.84%.
Based on historical P/E analysis, PEARSON PLC (PSO) appears expensive. The current P/E of 22.4 is 38% above its historical median of 16.2. The estimated fair value CAGR (P/E method) is 2.0%.
PEARSON PLC (PSO) operates in the Books: Publishing Or Publishing & Printing industry, within the Communication Services sector.
PEARSON PLC (PSO) reported annual revenue of $4.7 billion in its most recent fiscal year, based on SEC EDGAR filings.
Additional disclosures The Directors’ report for the year ended 31 December 2025 is on pages 70-157 of this document. Set out below is other statutory and regulatory information that Pearson is required to disclose in its Directors’ report. Going concern The Directors have confirmed that there are no material uncertainties that cast doubt on the Group’s going concern status and that they have a reasonable expectation that the Group has adequate resources to continue in operational existence beyond 30 June 2027. The consolidated financial statements have therefore been prepared on a going concern basis. Further details on the procedures undertaken may be found on page 182. Viability statement The Board assessed the prospects of the company using the company’s long-range plan. Viability was assessed by considering downside scenarios.
| Metric | TTM | FY2025 | FY2024 | FY2023 | FY2022 | FY2021 |
|---|---|---|---|---|---|---|
| Revenue | 4.7B | 4.7B | 4.5B | 4.6B | 4.7B | 4.7B |
| Net Income | 444M | 444M | 557M | 474M | 301M | 245M |
| EPS | $0.73 | $0.73 | $0.88 | $0.71 | $0.44 | $0.35 |
| Free Cash Flow | 490M | 490M | 439M | 281M | 4.9M | 54M |
| ROIC | 7.6% | 7.3% | 8.8% | 7.7% | 4.2% | 3.9% |
| Gross Margin | 52.0% | 52.0% | 51.0% | 49.9% | 46.7% | 49.0% |
| Debt/Equity | 0.42 | 0.42 | 0.44 | 0.29 | 0.28 | 0.33 |
| Dividends/Share | $0.35 | $0.35 | $0.32 | $0.29 | $0.28 | $0.29 |
| Operating Income | 669M | 669M | 692M | 622M | 334M | 252M |
| Operating Margin | 14.2% | 14.2% | 15.2% | 13.6% | 7.1% | 5.3% |
| ROE | 9.2% | 8.7% | 10.8% | 9.0% | 5.6% | 4.2% |
| Shares Outstanding | 611M | 611M | 632M | 665M | 690M | 705M |
| Metric | 2015 | 2016 | TTM | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Income Statement | ||||||||||||
| Revenue | 6.8B | 6.1B | 5.9B | 5.5B | 4.9B | 4.4B | 4.7B | 4.7B | 4.6B | 4.5B | 4.7B | 4.7B |
| Gross Margin | 55.7% | 54.0% | 54.2% | 52.9% | 52.0% | 48.0% | 49.0% | 46.7% | 49.9% | 51.0% | 52.0% | 52.0% |
| R&D | 50M | 31M | 18M | 19M | 17M | 14M | 16M | 12M | 10.0M | 7.7M | 11M | 11M |
| SG&A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
| EBIT | -617M | -3.4B | 585M | 736M | 351M | 530M | 252M | 334M | 622M | 692M | 669M | 669M |
| Op. Margin | -9.0% | -54.9% | 10.0% | 13.4% | 7.1% | 12.1% | 5.3% | 7.1% | 13.6% | 15.2% | 14.2% | 14.2% |
| Net Income | 1.3B | -3.1B | 530M | 785M | 340M | 425M | 245M | 301M | 474M | 557M | 444M | 444M |
| Net Margin | 18.4% | -51.3% | 9.0% | 14.3% | 6.9% | 9.7% | 5.2% | 6.4% | 10.3% | 12.2% | 9.4% | 9.4% |
| Non-Recurring | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Returns on Capital | ||||||||||||
| ROIC | 13.3% | -35.4% | 9.2% | 12.1% | 5.0% | 7.0% | 3.9% | 4.2% | 7.7% | 8.8% | 7.3% | 7.6% |
| ROE | 13.3% | -43.4% | 9.9% | 14.0% | 6.2% | 7.8% | 4.2% | 5.6% | 9.0% | 10.8% | 8.7% | 9.2% |
| ROA | 7.1% | -21.5% | 4.5% | 7.5% | 3.5% | 4.4% | 2.4% | 3.3% | 5.4% | 6.4% | 5.0% | 5.2% |
| Cash Flow | ||||||||||||
| Op. Cash Flow | 322M | 552M | 387M | 615M | 471M | 501M | 448M | 445M | 655M | 802M | 866M | 866M |
| Free Cash Flow | 191M | 433M | 387M | 522M | 471M | 85M | 54M | 4.9M | 281M | 439M | 490M | 490M |
| Owner Earnings | 322M | 552M | 387M | 615M | 471M | 340M | 117M | 277M | 653M | 798M | 861M | 861M |
| CapEx | 131M | 118M | 0 | 93M | 0 | 416M | 395M | 440M | 374M | 363M | 376M | 376M |
| Maint. CapEx | 0 | 0 | 0 | 0 | 0 | 161M | 331M | 168M | 2.5M | 3.8M | 5.3M | 5.3M |
| Growth CapEx | N/A | N/A | N/A | N/A | N/A | 255M | 63M | 272M | 372M | 359M | 371M | 371M |
| D&A | 0 | 0 | 0 | 0 | 0 | 161M | 331M | 168M | 2.5M | 3.8M | 5.3M | 5.3M |
| CapEx/OCF | 40.8% | 21.5% | N/A | 15.2% | N/A | 83.0% | 88.0% | 98.9% | 57.1% | 45.3% | 43.4% | 43.4% |
| Capital Allocation | ||||||||||||
| Dividends Paid | 646M | 571M | 413M | 181M | 189M | 188M | 205M | 192M | 192M | 200M | 211M | 211M |
| Dividend Yield | 6.8% | 8.7% | 8.8% | 2.9% | 3.1% | 4.6% | 3.2% | 3.1% | 2.8% | 2.5% | 2.4% | 2.1% |
| Share Buybacks | 35M | 36M | 0 | 0 | 66M | 7.7M | 22M | 46M | 44M | 42M | 83M | 83M |
| Buyback Yield | 0.6% | 0.6% | N/A | N/A | 1.3% | 0.1% | 0.4% | 0.6% | 0.6% | 0.4% | 1.0% | 0.8% |
| Stock-Based Comp | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
| Debt Repayment | 458M | 335M | 0 | 587M | 0 | 296M | 230M | 211M | 356M | 1.2B | 1.3B | 1.3B |
| Balance Sheet | ||||||||||||
| Net Debt | N/A | 1.4B | 736M | 202M | 1.6B | 714M | 636M | 828M | 1.1B | 1.6B | 1.6B | 1.6B |
| Cash & Equiv. | 50M | 2.0B | 672M | 756M | 558M | 1.4B | 1.3B | 688M | 389M | 695M | 440M | 440M |
| Long-Term Debt | N/A | 3.3B | 1.4B | 897M | 2.0B | 1.8B | 1.7B | 1.4B | 1.4B | 1.5B | 1.9B | 1.9B |
| Debt/Equity | 0.81 | 0.57 | 0.28 | 0.16 | 0.38 | 0.40 | 0.33 | 0.28 | 0.29 | 0.44 | 0.42 | 0.42 |
| Interest Coverage | -4.0 | -25.7 | 4.6 | 6.1 | 3.3 | 3.8 | 2.7 | 3.8 | 6.1 | 4.8 | 5.2 | 5.2 |
| Equity | 9.8B | 5.9B | 5.1B | 6.0B | 5.5B | 5.3B | 5.9B | 5.4B | 5.0B | 5.2B | 4.8B | 4.8B |
| Total Assets | 17.8B | 13.5B | 10.2B | 10.5B | 9.8B | 9.6B | 10.1B | 9.0B | 8.4B | 8.8B | 8.5B | 8.5B |
| Total Liabilities | 8.0B | 7.7B | 5.0B | 4.5B | 4.2B | 4.3B | 4.2B | 3.6B | 3.4B | 3.6B | 3.7B | 3.7B |
| Intangibles | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
| Retained Earnings | N/A | 964M | 859M | 1.4B | 1.2B | 1.1B | 1.5B | 1.1B | 930M | 1.1B | 830M | 830M |
| Working Capital | N/A | 2.9B | 1.2B | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
| Current Assets | N/A | 5.5B | 3.3B | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
| Current Liabilities | N/A | 2.6B | 2.1B | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A | N/A |
| Per Share Data | ||||||||||||
| EPS | 1.68 | -3.92 | 0.76 | 1.13 | 0.47 | 0.64 | 0.35 | 0.44 | 0.71 | 0.88 | 0.73 | 0.73 |
| Owner EPS | 0.43 | 0.69 | 0.56 | 0.89 | 0.65 | 0.52 | 0.17 | 0.40 | 0.98 | 1.26 | 1.41 | 1.41 |
| Book Value | 13.07 | 7.31 | 7.29 | 8.67 | 7.65 | 8.07 | 8.35 | 7.88 | 7.49 | 8.21 | 7.91 | 7.91 |
| Cash Flow/Share | 0.43 | 0.69 | 0.56 | 0.89 | 0.65 | 0.76 | 0.64 | 0.64 | 0.99 | 1.27 | 1.42 | 0.73 |
| Dividends/Share | 0.86 | 0.71 | 0.59 | 0.26 | 0.26 | 0.29 | 0.29 | 0.28 | 0.29 | 0.32 | 0.35 | 0.35 |
| Shares Out. | 750.0M | 801.1M | 694.7M | 694.7M | 721.5M | 660.1M | 704.6M | 690.3M | 665.0M | 631.8M | 611.2M | 611.2M |
| Valuation | ||||||||||||
| P/E Ratio | 4.8 | N/A | 10.3 | 8.6 | 15.1 | 12.6 | 21.4 | 23.5 | 16.2 | 17.7 | 19.2 | 22.4 |
| P/FCF | 31.4 | 13.8 | 14.1 | 13.0 | 10.9 | 63.0 | 97.8 | N/A | 27.4 | 22.5 | 17.4 | 20.3 |
| EV/EBIT | N/A | N/A | 10.6 | 9.5 | 19.1 | 11.5 | 23.4 | 23.7 | 14.1 | 16.6 | 15.1 | 17.3 |
| Price/Book | 0.6 | 1.0 | 1.1 | 1.1 | 0.9 | 1.0 | 0.9 | 1.3 | 1.5 | 1.9 | 1.8 | 2.1 |
| Price/Sales | 1.4 | 1.1 | 0.8 | 1.1 | 1.2 | 0.9 | 1.4 | 1.3 | 1.5 | 1.8 | 1.9 | 2.1 |
| FCF Yield | 3.2% | 7.3% | 7.1% | 7.7% | 9.2% | 1.6% | 1.0% | 0.1% | 3.6% | 4.4% | 5.7% | 4.9% |
| Market Cap | 6.0B | 6.0B | 5.4B | 6.8B | 5.1B | 5.4B | 5.2B | 7.1B | 7.7B | 9.9B | 8.5B | 10.0B |
| Avg. Price | 12.69 | 8.20 | 6.75 | 9.09 | 8.53 | 6.17 | 9.18 | 8.98 | 10.14 | 12.67 | 14.67 | 16.29 |
| Year-End Price | 8.00 | 7.45 | 7.83 | 9.73 | 7.11 | 8.11 | 7.44 | 10.25 | 11.58 | 15.62 | 13.95 | 16.29 |
PEARSON PLC passes 3 of 9 quality checks, indicating weak fundamentals.
PEARSON PLC trades at 22.4x trailing earnings, compared to its 15-year median P/E of 16.2x, suggesting it is currently Expensive relative to its historical range. On a free-cash-flow basis, the stock trades at 20.3x vs a median of 17.4x. The company's 5-year average ROIC is 6.4% with a gross margin of 49.7%. Total shareholder yield (dividends + buybacks) is 3.0%. At current prices, the estimated annualized return to fair value is +7.1%.
PEARSON PLC (PSO) has a net profit margin of 9.4%. This is a modest margin.
PEARSON PLC (PSO) generated $490 million in free cash flow in its most recent fiscal year. Positive free cash flow supports dividends, buybacks, and debt reduction.
PEARSON PLC (PSO) has a debt-to-equity ratio of 0.42. This indicates a conservatively financed balance sheet.
PEARSON PLC (PSO) reported earnings per share (EPS) of $0.73 in its most recent fiscal year.
PEARSON PLC (PSO) has a return on equity (ROE) of 8.7%. This indicates moderate shareholder returns.
PEARSON PLC (PSO) has a 5-year average gross margin of 49.7%. This indicates decent pricing power.
The Ledger Terminal provides 11 years of financial data for PEARSON PLC (PSO), sourced directly from SEC EDGAR filings. This includes income statements, balance sheets, cash flow statements, and key financial ratios.
PEARSON PLC (PSO) has a book value per share of $7.91, based on its most recent annual SEC filing.