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Pearson

PES.DE
46
Publishing · Communication Services
Price
€13.96
+0.12 (+0.87%)
Market Cap
€8.38B
Exchange
Frankfurt Stock Exchange
Winston Score
46
Winston is serious
Mixed quality — meaningful strengths and weaknesses.
Data as of Aug 23, 2026 · filings through Jun 30, 2026
How the score breaks down
Quality
Good
Growth
Weak
Cash Flow
Exceptional
Stability
Strong
Valuation
Strong
Dividends
Mixed

Share count falling — buybacks

13.0% over 4y

The company has reduced its share count over this period, returning value to shareholders through buybacks.

Diluted shares outstanding: 759.1M (2021) → 660.3M (2025)

Winston Score History

The full picture

Pearson is a British education company that makes textbooks, online courses, and learning software. Its main customers are students, schools, universities, and working adults who want to earn new skills or qualifications. Pearson is one of the largest education publishers in the world and owns well-known testing programs like GED and Pearson VUE.

Pearson earns money by selling digital learning subscriptions, print and digital textbooks, and professional certification tests. It operates globally but gets most of its revenue from the United States and the United Kingdom. Its large library of educational content and its testing infrastructure are hard for smaller competitors to replicate quickly. The key growth driver is its shift toward direct-to-consumer digital subscriptions, which could improve recurring revenue, but the main risk is declining enrollment in traditional higher education, which has historically been its largest market.

Growth Profile

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

Revenue Growth

+2.7% YoY

YoY Growth Rate

Slow revenue growth

EPS Growth

-4.0% YoY

YoY Growth Rate

Earnings declining

R&D Spend

£0/ year

Declining (-100% vs prior year)

0.0% of revenue

Below sector average (12%)

R&D spend declining — could signal cost-cutting or efficiency

Insider Activity

0.0%ownership

Flat

Insider ownership roughly steady over the past year

Cash Position

Cash flow positive

£646M cash & investments

Quarterly Free Cash Flow

↑ Burn rate improving

Company generates more cash than it spends — no dilution risk from fundraising

Growth context

Pearson is growing revenue at 3% 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

Profit per sale
Gross Margin
51.2%
Healthy — 51.2% gross margin
Profit after running costs
Operating Margin
14.2%
Healthy — 14.2% operating margin
Return on the money invested
ROCE
11.3%
Below par — 11.3% return on capital

ROIC between 5% and 15%. They earn 5 to 15 cents back per year on every dollar invested.

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Growth

Sales growth
Sales YoY
+3.0%
Nearly flat sales (+3.0% YoY)
Profit growth
EPS YoY
-22.7%
Earnings shrinking (-22.7% YoY)

Earnings per share down more than 10%. Either a bad year, or a real decline.

How steady the profit is
EPS Consistency
4/8 quarters
Earnings inconsistent quarter-to-quarter

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Cash Flow

Profit that turns into cash
Cash Conversion
259%
Turns 259% of profit into real cash
Spare cash per sale
FCF Margin
21.6%
Converts sales into free cash efficiently (21.6%)

Free cash flow margin above 20%. Out of every $100 in sales, more than $20 is real cash they keep.

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Stability

What it owes vs what it owns
Debt / Equity
0.41
Conservative — low debt load (0.41)
Covers its interest
Interest Cover
4.23x
Adequate interest coverage (4.2x)

Interest coverage between 3 and 8. Profits cover interest several times over.

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Valuation

Price vs profit
P/E Ratio (TTM)
27.4x
Growth-priced — P/E 27.4

P/E above the market average. People are paying up for expected growth.

Cheaper or dearer next year
P/E vs Forward
+12.3
GROWING
Earnings expected to grow meaningfully — cheaper on forward P/E (27.4 → 15.0)

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Dividends

Dividend
Dividend Yield
1.34%
Small dividend — 1.34% yield

Modest yield. The bulk of any return needs to come from price appreciation.

Dividend record
Dividend Growth
+8.0%
Dividend growing modestly (8.0% YoY)

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