Scholastic (NASDAQ:SCHL) Shares Up 7.1% - Time to Buy?

Key Points

• Scholastic shares rose 7.1% to about $41.96 on Thursday, with volume ~53% below its average, and the stock carries a consensus rating of Moderate Buy with a $40 target.
• The company beat quarterly EPS expectations—reporting ($0.15) vs. an expected ($0.37) (a $0.22 beat)—while revenue of $329.1M was slightly below estimates; analysts project FY earnings of about $1.88 per share.
• Scholastic announced a quarterly dividend of $0.20 (annualized yield ~1.9%) and the board authorized a $200 million share repurchase program (up to ~23% of shares), signaling management confidence in the stock.

Scholastic Corporation (NASDAQ:SCHL - Get Free Report)'s share price rose 7.1% during mid-day trading on Thursday . The company traded as high as $41.76 and last traded at $41.9560. Approximately 264,032 shares traded hands during trading, a decline of 53% from the average daily volume of 556,799 shares. The stock had previously closed at $39.19.

Wall Street Analysts Forecast Growth

SCHL has been the subject of several research reports. B. Riley Financial upped their price target on shares of Scholastic from $37.00 to $40.00 and gave the company a "neutral" rating in a research report on Friday, March 20th. Wall Street Zen raised shares of Scholastic from a "hold" rating to a "buy" rating in a report on Saturday, March 21st. Weiss Ratings upgraded shares of Scholastic from a "sell (d+)" rating to a "hold (c-)" rating in a research note on Friday, January 30th. Finally, Zacks Research upgraded Scholastic from a "hold" rating to a "strong-buy" rating in a research note on Friday, April 3rd. One equities research analyst has rated the stock with a Strong Buy rating and two have assigned a Hold rating to the stock. Based on data from MarketBeat.com, Scholastic currently has a consensus rating of "Moderate Buy" and a consensus target price of $40.00.

Scholastic Stock Up 7.4%

The firm has a market cap of $915.14 million, a PE ratio of 16.97 and a beta of 1.08. The firm's fifty day simple moving average is $36.39 and its two-hundred day simple moving average is $32.46.

Scholastic (NASDAQ:SCHL - Get Free Report) last announced its quarterly earnings data on Thursday, March 19th. The company reported ($0.15) earnings per share (EPS) for the quarter, topping analysts' consensus estimates of ($0.37) by $0.22. The firm had revenue of $329.10 million during the quarter, compared to analysts' expectations of $331.53 million. Scholastic had a net margin of 3.88% and a return on equity of 2.47%. As a group, analysts anticipate that Scholastic Corporation will post 1.88 earnings per share for the current fiscal year.

Scholastic Announces Dividend

The firm also recently disclosed a quarterly dividend, which will be paid on Monday, June 15th. Stockholders of record on Thursday, April 30th will be given a $0.20 dividend. This represents a $0.80 annualized dividend and a dividend yield of 1.9%. The ex-dividend date is Thursday, April 30th. Scholastic's payout ratio is presently 32.26%.

Scholastic declared that its board has authorized a share repurchase program on Friday, March 20th that allows the company to repurchase $200.00 million in shares. This repurchase authorization allows the company to reacquire up to 23% of its shares through open market purchases. Shares repurchase programs are typically an indication that the company's leadership believes its stock is undervalued.

Institutional Inflows and Outflows

A number of large investors have recently added to or reduced their stakes in the business. Vanguard Group Inc. boosted its stake in Scholastic by 3.8% in the 4th quarter. Vanguard Group Inc. now owns 1,593,981 shares of the company's stock worth $47,230,000 after purchasing an additional 59,017 shares during the period. Alliancebernstein L.P. lifted its holdings in shares of Scholastic by 879.3% in the third quarter. Alliancebernstein L.P. now owns 1,159,261 shares of the company's stock worth $31,741,000 after buying an additional 1,040,880 shares in the last quarter. J. Goldman & Co LP boosted its position in shares of Scholastic by 4.1% during the fourth quarter. J. Goldman & Co LP now owns 797,878 shares of the company's stock worth $23,641,000 after acquiring an additional 31,427 shares during the last quarter. American Century Companies Inc. grew its stake in Scholastic by 6.4% during the third quarter. American Century Companies Inc. now owns 739,366 shares of the company's stock valued at $20,244,000 after acquiring an additional 44,558 shares in the last quarter. Finally, Bragg Financial Advisors Inc grew its stake in Scholastic by 13.0% during the fourth quarter. Bragg Financial Advisors Inc now owns 668,904 shares of the company's stock valued at $19,820,000 after acquiring an additional 76,801 shares in the last quarter. 82.57% of the stock is owned by hedge funds and other 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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