McGraw Hill (MH) Stock Analysis & Winston Score

McGraw Hill makes educational materials for students and teachers. Its main products are textbooks, digital learning platforms, and online homework and assessment tools. The company sells mostly to colleges and universities in the United States, but also serves K-12 schools and international markets.

McGraw Hill earns money by selling digital subscriptions and course materials directly to students, and by licensing its content to schools and institutions. Most of its revenue comes from North America, and the company competes with Pearson and Cengage in the higher education market. Its large library of academic content and deep relationships with university faculty give it some staying power, but the company carries significant debt from a leveraged buyout, which explains its negative return on invested capital. The key risk is that open-access textbooks and free online resources continue to pressure pricing and reduce demand for paid course materials.

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

+12.9% YoY

YoY Growth Rate

Steady revenue growth

EPS Growth

-7.9% YoY

YoY Growth Rate

Earnings declining

Insider Activity

87.2%ownership

↓ Declining

Insider ownership declining — could be dilution or selling

Cash Runway

~12 months

$390M cash & investments

Quarterly Free Cash Flow

↑ Burn rate improving

Adequate runway but may need to raise capital within 2 years

Growth context

McGraw Hill is growing revenue at 13% year-over-year. The Winston Score measures business quality today — these growth metrics show what could matter tomorrow.

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.

Score breakdown

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Quality

Gross Margin

83.4%

Premium pricing power — 83.4% gross margin

Operating Margin

5.9%

Thin — 5.9% operating margin

ROCE

0.8%

Weak — 0.8% return on capital

ROIC between 0% and 5%. They earn a few cents back per dollar invested in the business.

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Growth

Sales YoY

+3.2%

Slow sales growth (3.2% 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

N/A

Data not available

FCF Margin

15.0%

Converts sales into free cash efficiently (15.0%)

FCF margin between 10% and 20%. Every $100 in sales becomes $10 to $20 in real cash.

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Stability

Debt / Equity

11.34

Heavy debt load (11.34)

Interest Cover

1.38x

Dangerous — barely covers interest (1.4x)

Interest coverage between 1 and 3. Profits cover interest, but with little room to spare.

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Valuation

P/E Ratio (TTM)

55.4x

no trend

Expensive — P/E 55.4

P/E over 35. The market is pricing in heavy, sustained growth.

P/E vs Forward

+50.3

GROWING

Earnings expected to grow meaningfully — cheaper on forward P/E (55.4 → 5.1)

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Dividends

Not applicable for this business.

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