| Factor | Score | Distribution | Value | Avg | Rank |
|---|---|---|---|---|---|
Valuation | 74 | 21.9x | 17.8x | Top tier | |
Growth | 33 | 0.7% | 7.1% | Bottom tier | |
Quality | 66 | — | 4.5% | Top tier | |
Safety | 72 | 1.4x | 2.6x | Top tier | |
Capital Return | 63 | 2.13% | 2.12% | Around median | |
Momentum | 79 | 12.3% | 2.9% | Top tier | |
Sentiment | 38 | 3 | 3 | Bottom tier |
Estimates — analyst targets and a simplified DCF, not investment advice.
Ten ratios that matter, each compared against its sector median and average — so you can see whether a number is rich or cheap relative to peers in the same sector.
Pearson plc operates in education, assessment, and skills verification services, generating profits from testing and professional and clinical qualifications, virtual schools, printed and digital educational content, corporate and professional learning solutions, and English language education. About 90% of its profits come from Assessments & Verification, virtual schools, and print, activities that rely on human-led services and complex physical and digital workflows, and often operate within regulated markets; the remaining 10% comes from digital courseware content, particularly in U.S. higher education. The company also provides a global skills verification infrastructure serving companies, professional associations, states, and government entities.
In the first half ending within Q2 FY2026, underlying revenue rose 4%, adjusted operating profit increased 14% to £226 million, and the margin expanded 140 basis points to 15.5%, while adjusted earnings per share rose 19% at constant exchange rates to 28.9 pence. Free cash flow reached £259 million, an increase of £103 million, benefiting partly from the timing of payables and a one-time U.S. insurance policy settlement. The annual financial statements for FY2025 showed revenue of $3.6 billion, gross profit of $1.9 billion, and net income of $336 million, compared with net income of $435 million in FY2024.
The growth mix in the first half of FY2026 was mixed: Virtual Learning grew 19% and its margin reached 18%, Enterprise Learning & Skills grew 7% with a 28% margin, and Higher Education rose 2% with a 6% margin, while Assessment & Qualifications also increased 2% despite its margin declining 20%. In contrast, English Language Learning revenue fell 3% because of weakness in Pearson Test of English, despite growth in the institutional business. This mix shows that virtual schools and corporate learning offset pressure from language testing and some U.S. student assessment contracts.
The analyst consensus on PSO is neutral, with an average price target of $14.5 and a wide range of $11 to $18 reflecting meaningful differences in views on Pearson's prospects. The average is below the 52-week range high of $17.75, while the highest target slightly exceeds that high and the lowest target falls below the range low of $12.02; the data does not include a valid price-to-earnings ratio that can be used to compare valuation with earnings.
Figures in the text are as of 2026-08-29; the live price is shown at the top of the page.
In the first half of FY2026, underlying revenue rose 4% and adjusted operating profit increased 14% to £226 million. Virtual Learning led growth with a 19% increase, while Enterprise Learning & Skills grew 7% and Assessment & Qualifications and Higher Education each grew 2%. Management reaffirmed guidance for mid-single-digit underlying revenue growth and adjusted operating profit of between £640 million and £685 million for FY2026.
Pearson launched a global assessment and certification program for a leading artificial intelligence laboratory in a single-digit number of months, compared with a historical launch cycle of between 18 and 24 months. By the July 31, 2026 call, tens of thousands of people had applied to the program through the Pearson Professional Assessments network. The company is also using artificial intelligence internally, with self-service now handling 40% of customer interactions in the early stages of implementation, while its research showed that users of its adaptive products were 90% more likely to achieve initial mastery than with legacy educational tools.
Automated analysis for informational purposes only — not investment advice.
Virtual Learning grew 19% in the first half of FY2026, with enrollment growth accelerating to 15% in the spring and the margin rising to 18%. Pearson successfully renewed all ten long-term contracts scheduled for renewal and was on track to open five new schools in the academic year following the July 31, 2026 results. Management estimated that the virtual learning market grew at a high-single-digit enrollment rate during the 2025–2026 academic year and said that Pearson's share performance was better than the market.
English Language Learning revenue declined 3% in the first half of FY2026 because growth in the institutional business did not offset the decline in Pearson Test of English. Management linked the weakness to lower study abroad activity, tighter immigration policies, and geopolitical disruption, after the immigration market declined 15% in FY2025 and continued falling at a slower pace in FY2026. Pearson therefore updated its outlook for the segment to indicate that its growth in FY2026 had become less certain, while maintaining confidence in guidance for the group as a whole.
Adjusted operating profit reached £226 million in the first half of FY2026, and the margin increased 140 basis points to 15.5%. Adjusted earnings per share rose 19% at constant exchange rates to 28.9 pence, while free cash flow reached £259 million, an increase of £103 million. However, part of the cash flow strength came from the timing of payables and a one-time U.S. insurance policy settlement, while net debt increased by £0.3 billion to £1.3 billion after share buybacks, acquisition spending, and dividends.
The aggregate analyst recommendation is neutral, and the average price target is $14.5. The target range is between $11 and $18, compared with a 52-week range of $12.02 to $17.75, revealing a wide divergence between conservative and optimistic scenarios. The data does not include an available price-to-earnings ratio, so the stock's valuation here is based on the analyst target range and 52-week range rather than a specific earnings multiple.
