Scholastic (NASDAQ:SCHL) Shares Gap Down - Here's Why

Key Points

• Scholastic shares gapped down after the company reported fiscal Q4 results, opening well below the prior close even though earnings per share beat expectations.
• The quarter showed a mixed picture: EPS came in at $2.19 vs. $2.16 expected, but revenue missed at $476.1 million versus $517.1 million consensus, and FY2027 revenue guidance of about $1.6 billion was also below analyst expectations.
• Scholastic boosted its quarterly dividend by 25% to $0.25 per share and said fiscal 2027 should return to revenue growth with higher adjusted EBITDA, signaling confidence in the business outlook.

Scholastic Corporation (NASDAQ:SCHL - Get Free Report)'s share price gapped down prior to trading on Friday . The stock had previously closed at $46.44, but opened at $42.38. Scholastic shares last traded at $43.9130, with a volume of 91,076 shares trading hands.

Scholastic News Summary

Here are the key news stories impacting Scholastic this week:

• Positive Sentiment: Scholastic raised its quarterly dividend by 25% to $0.25 per share, a shareholder-friendly move that signals confidence in cash generation and can support the stock. Scholastic Corporation Increases Quarterly Dividend by 25%
• Positive Sentiment: The company beat fiscal Q4 EPS estimates, reporting $2.19 per share versus the $2.16 consensus, and said fiscal 2026 adjusted EBITDA rose 4% to $151.5 million. Scholastic Reports Fourth Quarter and Fiscal 2026 Results
• Positive Sentiment: Management said fiscal 2027 is expected to return to revenue growth and deliver higher adjusted EBITDA on a comparable basis, which may improve investor sentiment around the turnaround story. Scholastic Reports Fourth Quarter and Fiscal 2026 Results
• Neutral Sentiment: Q4 revenue came in at $476.1 million, below the $517.1 million consensus, so the earnings beat was partially offset by weaker sales. Scholastic earnings release and transcript
• Neutral Sentiment: The company also updated FY2027 revenue guidance to about $1.6 billion, below the roughly $1.7 billion analyst expectation, which may limit upside from the report. Scholastic Reports Fourth Quarter and Fiscal 2026 Results

Analyst Upgrades and Downgrades

A number of research analysts have recently commented on SCHL shares. B. Riley Financial increased their target price on shares of Scholastic from $40.00 to $42.00 and gave the stock a "neutral" rating in a report on Wednesday, July 8th. Weiss Ratings reaffirmed a "hold (c+)" rating on shares of Scholastic in a report on Thursday, June 18th. Zacks Research cut shares of Scholastic from a "strong-buy" rating to a "hold" rating in a research report on Tuesday, May 19th. Finally, Wall Street Zen downgraded shares of Scholastic from a "buy" rating to a "hold" rating in a research note on Saturday, April 25th. Three analysts have rated the stock with a Hold rating, According to data from MarketBeat, the stock currently has a consensus rating of "Hold" and a consensus target price of $42.00.

Scholastic Stock Performance

The business has a fifty day simple moving average of $43.72 and a 200-day simple moving average of $38.88. The firm has a market cap of $962.06 million, a price-to-earnings ratio of 17.82, a PEG ratio of 1.48 and a beta of 0.99.

Scholastic (NASDAQ:SCHL - Get Free Report) last posted its earnings results on Thursday, July 23rd. The company reported $2.19 EPS for the quarter, beating the consensus estimate of $2.16 by $0.03. Scholastic had a return on equity of 2.47% and a net margin of 3.88%.The firm had revenue of $476.10 million during the quarter, compared to the consensus estimate of $517.06 million. During the same period last year, the company earned $0.59 earnings per share. On average, equities analysts anticipate that Scholastic Corporation will post 1.79 earnings per share for the current year.

Scholastic Increases Dividend

The firm also recently disclosed a quarterly dividend, which will be paid on Tuesday, September 15th. Investors of record on Monday, August 31st will be issued a $0.25 dividend. This is a boost from Scholastic's previous quarterly dividend of $0.20. The ex-dividend date is Monday, August 31st. This represents a $1.00 dividend on an annualized basis and a yield of 2.3%. Scholastic's dividend payout ratio (DPR) is 32.26%.

Institutional Investors Weigh In On Scholastic

A number of institutional investors have recently added to or reduced their stakes in SCHL. Alliancebernstein L.P. lifted its holdings in shares of Scholastic by 879.3% during the third quarter. Alliancebernstein L.P. now owns 1,159,261 shares of the company's stock worth $31,741,000 after purchasing an additional 1,040,880 shares during the period. Verition Fund Management LLC acquired a new stake in Scholastic in the third quarter valued at $7,288,000. Thompson Siegel & Walmsley LLC bought a new position in Scholastic during the 4th quarter worth $7,070,000. Invesco Ltd. raised its position in Scholastic by 57.2% during the 4th quarter. Invesco Ltd. now owns 424,973 shares of the company's stock worth $12,592,000 after purchasing an additional 154,668 shares during the last quarter. Finally, AQR Capital Management LLC lifted its holdings in Scholastic by 160.5% during the 1st quarter. AQR Capital Management LLC now owns 157,436 shares of the company's stock worth $2,972,000 after buying an additional 96,998 shares during the period. 82.57% of the stock is owned by institutional investors.

About Scholastic

Scholastic Corporation NASDAQ: SCHL is a global company dedicated to children's publishing, education technology and distribution services. The company's core business encompasses three primary segments: Children's Book Publishing and Distribution, Education Technology, and International operations. Through its publishing arm, Scholastic produces and distributes a wide range of children's books, novels, nonfiction titles and classroom magazines under well-known imprints such as Scholastic Press, Graphix and Chicken House.

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