Educational Development Corporation (EDUC) Stock Analysis & Winston Score

Educational Development Corporation (EDC) is a US-based publisher that sells children's books. The company is best known for distributing Usborne Books, a British publisher of educational and illustrated books for kids of all ages. Its main customers are parents, schools, and gift buyers looking for high-quality children's learning materials.

EDC sells its books primarily through a network of independent consultants who host book fairs and parties, similar to a direct-sales model. The company operates almost entirely in the United States and is a small-cap business with a market cap under $100 million. Its exclusive US distribution rights for Usborne Books gave it a competitive edge for years, but the company has faced declining sales as its consultant network has shrunk and consumer spending on discretionary items like books has softened — making rebuilding that sales force the central challenge ahead.

Winston Score History

Growth Profile

For growth stock investors

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

-26.0% YoY

YoY Growth Rate

Revenue declining

EPS Growth

+20.0% YoY

YoY Growth Rate

Steady EPS growth

R&D Spend

$0/ year

0.0% of revenue

Below sector average (12%)

Research and development spending

Insider Activity

25.0%ownership

→ Flat

Insiders holding steady — not selling despite ability to

Cash Runway

~1 months

$428,400 cash & investments

Quarterly Free Cash Flow

↓ Burn rate worsening

Short runway — potential dilution ahead through share issuance

Cash watch

Educational Development Corporation has less than a year of cash at its current burn rate. Growth investors should watch for potential share dilution from future fundraising — that directly reduces your ownership.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Share count broadly stable

+0.7% over 4y

The share count has stayed roughly flat over this period — little dilution or buyback activity.

Diluted shares outstanding: 8.5M (2022) → 8.5M (2026)

Score breakdown

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Quality

Gross Margin

60.5%

Premium pricing power — 60.5% gross margin

Operating Margin

-21.1%

Losing money on operations — -21.1%

ROCE

-2.0%

Weak — -2.0% return on capital

Negative ROIC means the business is losing money on every dollar invested in it.

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Growth

Sales YoY

-30.5%

Shrinking sales (-30.5% YoY)

EPS YoY

N/A

Data not available

EPS Consistency

2/8 quarters

Earnings rarely grow — volatile business

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Cash Flow

Cash Conversion

60%

Weak — only 60% of profit becomes cash

FCF Margin

7.3%

Modest free cash flow (7.3%)

FCF margin between 0% and 10%. Some cash from sales, but not a lot.

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Stability

Debt / Equity

0.77

Moderate — manageable debt (0.77)

Interest Cover

N/A

Data not available

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Valuation

P/E Ratio (TTM)

3.1x

Attractive valuation — P/E 3.1

P/E under 10. The price tag is small relative to last year's profit.

P/E vs Forward

+1.5

GROWING

Earnings expected to grow — slightly cheaper on forward P/E

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Dividends

Not applicable for this business.

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