MH Stock Forecast & Price Target

McGraw Hill Inc. is experiencing positive momentum with expected recurring revenue rising to between $1,504 million and $1,524 million, marking an increase from previous estimates. The company's revised fiscal year 2026 guidance now projects revenue of $2,031 million to $2,061 million and reflects strong growth in higher education enrollment, particularly at community colleges, which saw a 4.0% year-over-year increase. Additionally, the company is gaining market share in K-12 education, with approximately 200 basis points of share gain reported, alongside improved cost efficiencies and a potential rise in Adjusted EBITDA margins to the upper 30s or better.

McGraw Hill faces significant headwinds primarily due to declining enrollment trends in the Higher Education segment, which is particularly vulnerable given its discretionary nature compared to K-12 education. The company's financial outlook is further challenged by potential disruptions from generative artificial intelligence and competitive pressures, which could adversely impact demand and pricing for its products. Additionally, fluctuations in federal, state, and local education funding, coupled with changes in purchasing dynamics for K-12 instructional materials, introduce further risks that may hinder revenue growth and cash flow generation.