Zacks Research Downgrades Scholastic (NASDAQ:SCHL) to Strong Sell

Key Points

• Zacks Research downgraded Scholastic to “strong sell” from “hold,” while the broader analyst consensus remains “reduce” with a $42 target price.
• Scholastic reported quarterly EPS of $2.19, slightly beating estimates, but revenue of $476.1 million was well below the $517.1 million consensus, raising concerns about operating momentum.
• Analysts have reduced forward earnings expectations and the company’s outlook was cut despite book-fair momentum and cost controls, suggesting pressure on near-term demand and profitability.

Scholastic (NASDAQ:SCHL - Get Free Report) was downgraded by equities researchers at Zacks Research from a "hold" rating to a "strong sell" rating in a note issued to investors on Monday,Zacks.com reports.

SCHL has been the topic of several other reports. B. Riley Financial boosted their price target on Scholastic from $40.00 to $42.00 and gave the company a "neutral" rating in a research note on Wednesday, July 8th. Weiss Ratings restated a "hold (c+)" rating on shares of Scholastic in a research note on Thursday, June 18th. Finally, Wall Street Zen cut Scholastic from a "buy" rating to a "hold" rating in a research report on Saturday, April 25th. Two analysts have rated the stock with a Hold rating and one has issued a Sell rating to the company. According to data from MarketBeat.com, the stock has a consensus rating of "Reduce" and a consensus target price of $42.00.

Scholastic Price Performance

NASDAQ:SCHL opened at $40.63 on Monday. The company has a debt-to-equity ratio of 0.10, a current ratio of 1.23 and a quick ratio of 0.73. Scholastic has a one year low of $22.68 and a one year high of $48.07. The company has a fifty day moving average price of $43.80 and a 200 day moving average price of $39.10. The stock has a market cap of $883.30 million, a P/E ratio of 17.36, a PEG ratio of 1.96 and a beta of 0.99.

Scholastic (NASDAQ:SCHL - Get Free Report) last posted its quarterly earnings data on Thursday, July 23rd. The company reported $2.19 earnings per share (EPS) for the quarter, topping the consensus estimate of $2.16 by $0.03. The company had revenue of $476.10 million for the quarter, compared to the consensus estimate of $517.06 million. Scholastic had a net margin of 3.58% and a return on equity of 5.29%. During the same quarter in the previous year, the firm posted $0.59 EPS. Analysts anticipate that Scholastic will post 1.6 earnings per share for the current year.

Institutional Trading of Scholastic

Several large investors have recently added to or reduced their stakes in the company. JGP Global Gestao de Recursos Ltda. bought a new position in shares of Scholastic in the fourth quarter valued at approximately $1,044,000. Caxton Associates LLP grew its position in Scholastic by 248.3% during the 1st quarter. Caxton Associates LLP now owns 40,079 shares of the company's stock worth $1,565,000 after acquiring an additional 28,571 shares during the last quarter. Salzhauer Michael bought a new stake in Scholastic during the 4th quarter worth approximately $524,000. Vanguard Group Inc. increased its holdings in Scholastic by 3.8% during the 4th quarter. Vanguard Group Inc. now owns 1,593,981 shares of the company's stock valued at $47,230,000 after purchasing an additional 59,017 shares in the last quarter. Finally, Principal Financial Group Inc. raised its position in Scholastic by 62.1% in the 1st quarter. Principal Financial Group Inc. now owns 174,539 shares of the company's stock valued at $6,817,000 after purchasing an additional 66,890 shares during the last quarter. 82.57% of the stock is owned by institutional investors.

Key Scholastic News

Here are the key news stories impacting Scholastic this week:

• Positive Sentiment: Scholastic was identified as an oversold communication-services stock, with an RSI below 30. That technical condition may attract bargain hunters and support a potential rebound. Top 3 Tech And Telecom Stocks That Could Lead To Your Biggest Gains In July
• Neutral Sentiment: A dividend-related update has renewed investor attention around SCHL’s shareholder-return policy, although the available report does not specify a clearly positive or negative change. Scholastic Dividend Move Sparks Fresh Focus
• Neutral Sentiment: Sidoti made a small improvement to its Q1 2027 EPS forecast, to a loss of $3.11 from a projected loss of $3.12, and raised its Q1 2028 estimate to a loss of $3.31 from $3.48. These modest changes provide limited support but do not offset broader estimate reductions. Sidoti Scholastic Estimates
• Negative Sentiment: Scholastic’s outlook was cut despite reported book-fair momentum and cost controls. The guidance reduction raises concerns about near-term demand and profitability. SCHL Q2 Deep Dive: Guidance Cut Despite Book Fair Momentum and Cost Controls
• Negative Sentiment: Sidoti lowered its FY2027 EPS forecast to $1.44 from $2.62 and reduced several quarterly estimates, including Q3 2027 and Q4 2027. The revisions suggest analysts expect materially weaker earnings ahead. Sidoti Scholastic Earnings Estimate Revisions
• Negative Sentiment: The latest reported quarter showed an EPS beat, at $2.19 versus the $2.16 consensus, but revenue of $476.1 million fell well short of the $517.1 million estimate. The sales miss reinforces concerns about operating momentum.
• Negative Sentiment: A bearish analysis argues that Scholastic’s past performance does not support a favorable near-term outlook, adding to the pressure from reduced forecasts. Scholastic Corporation: A Look Back Does Not Bode Well For The Road Ahead

Scholastic Company Profile

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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