MH Stock Forecast & Price Target

McGraw Hill Inc. is projecting recurring revenue in the range of $1,504-$1,524 million, an increase from previous estimates, alongside an anticipated increase in EBITDA from $657 million at a 33% margin to $727 million at a 35% margin in FY25, mainly driven by robust growth in the Higher Education segment. Recent data indicating a 2.4% year-over-year increase in higher education enrollment, especially a 4.0% growth at community colleges, further supports the company's positive outlook as it continues to expand its market share from 28% and drives significant share gains. Additionally, the company's revised FY26 revenue guidance of $2,031-$2,061 million demonstrates strong operational momentum and suggests a sustainable growth trajectory bolstered by a combination of share expansion, enrollment growth, and pricing strategies.

McGraw Hill Inc. is projected to experience a total revenue decline of 4.1% year-over-year for FY25, with an EBITDA margin decreasing by 70 basis points due to operating leverage challenges primarily linked to K-12 purchasing cycles. The company is facing adverse enrollment trends in the Higher Education sector, which is expected to be exacerbated by a significant reduction in purchasing opportunities from key funding cycles in its top three states, leading to an anticipated 12% drop in K-12 revenue. Additionally, budgetary constraints from institutions suffering from declining international enrollment may further hinder investments in premium educational products, compounding the overall negative outlook for the company's financial performance.