Pearson plc (PSO): What Does Valuation Ratios Tell Us?

Pearson plc (NYSE:PSO) saw a downside of -1.16% to $10.69 after subtracting -$0.13 on Wednesday. The 5-day average trading volume is 438,669 shares of the company’s common stock. It has gained $10.84 in the past week and touched a new high 4 times within the past 5 days. An average of 340,272 shares of the company has been traded in the last 20 days, and the 50-day average volume stands at 338,201.

PSO’s 1-month performance is 0.90% or $0.24 on its low of $10.43 reached on 07/11/23. The company’s shares have touched a 52-week low of $9.05 and high of $12.03, with the stock’s rally to the 52-week high happening on 01/19/23. YTD, PSO has lost -5.10% or -$0.57 and has reached a new high 4 times. However, the current price is down -11.10% from the 52-week high price.

Valuation Metrics

PSO stock has a beta of 0.41. Moving on to other valuation ratios, the trailing price-to-sales (P/S) ratio is 1.54 while the price-to-book (PB) in the most recent quarter is 1.44, with the price to cash flow ratio at 43.26.

Pearson plc’s quick ratio for the recent period was 2.10, with the current ratio over the same period at 2.10. In terms of profitability, the gross margin trailing 12 months is 48.00%. The trailing 12-month EBITDA margin is 25.12%. The firm’s gross profit as reported stood at $2.22 billion against revenue of $4.75 billion.

Earnings Surprise

Pearson plc’s cash and short-term investments amounted to $9.0 million against total debt of $1.43 billion. Net income shrunk -28.1% to $242.0 million, while revenue of $0.0 was 100.0% off the previous quarter. PSO stock balance sheet for the recent quarter shows that total liabilities totaled 3.6 billion, with total debt at $1.43 billion.

Let’s look briefly at Pearson plc (PSO) price momentum from a technical analysis perspective. The 9-day relative strength index as at close on 08 August was 45.38% to suggest the stock is trending Neutral, with historical volatility in this time period at 21.86%.

The stock’s 5-day moving average is $10.65, reflecting a +1.42% or $0.15 change from its current price. PSO is currently trading -2.01% above its 20-day SMA, +4.80% above its 100-day SMA. However, the stock’s current price level is away from the SMA50 by +8.85% and SMA200 by+7.54%.

Stochastic %K and %D was 34.54% and 25.70% and the average true range (ATR) pointed at 0.17. The RSI (14) points at 48.19%, while the 14-day stochastic is at 30.12% with the period’s ATR at 0.16. The stock’s 9-day MACD Oscillator is pointing at -0.01 and -0.12 on the 14-day charts.

Analyst Ratings

In the most recent analyst report for Pearson plc (NYSE: PSO), UBS upgraded it to a Buy rating. They previously had a Neutral rating on the stock. Analysts offering their rating for PSO stock have a consensus rating for the stock as Overweight. Currently, 0 brokerage advisors rate PSO as a “sell,”, while 3 advise that investors “Hold.” 1 analysts have rated the stock as underweight. 0 rates the stock as overweight while 8 have offered a “buy” rating.

What is PSO’s price target for the next 12 months?

Analysts have a consensus price target ranging from a low of $11.58 and a high of $15.31, with their median price target at $13.25. Looking at these predictions, the average price target given by analysts is for Pearson plc (PSO) stock is $13.30.

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