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Investing.com - BTIG initiated coverage on McGraw Hill (NYSE:MH) with a Buy rating and a $19.00 price target on Monday, citing the company’s transformation into a digital-first business with high recurring revenue. The stock, currently trading at $13.35, sits near its 52-week low of $12.55, while InvestingPro data shows an impressive gross profit margin of 80.11%.
The research firm highlighted McGraw Hill as a top operator in the courseware space, noting its track record of market share gains and innovative product portfolio. BTIG pointed out that McGraw Hill’s Remaining Performance Obligation has increased by an estimated 47% over the past six fiscal years to $1.7 billion, creating significant revenue visibility.
McGraw Hill has successfully shifted toward digital offerings, which now represent 65% of total revenue, up from 31% in fiscal year 2015, according to BTIG. When excluding the K-12 segment, which remains more print-heavy, digital revenue accounts for 82% of the total.
BTIG identified multiple growth catalysts for McGraw Hill, including an upcoming multi-year K-12 upcycle expected to begin after the current school year, growth potential in Inclusive Access for higher education, and a slate of recently introduced products designed to improve retention, create new revenue streams, or lower costs.
The firm projects McGraw Hill will achieve mid-single-digit growth over multiple years following fiscal year 2026, while expanding its mid-30s adjusted EBITDA margins. BTIG’s $19 price target represents over 40% potential upside and is based on 8x calendar year 2026 adjusted EBITDA, which it considers reasonable compared to peers.
In other recent news, McGraw Hill has been the focus of several analyst firms initiating coverage on its stock. Morgan Stanley has given McGraw Hill an Overweight rating with a price target of $20.00, highlighting the company’s position in the $30 billion education content market. Rothschild Redburn also initiated coverage with a Buy rating and a more optimistic price target of $28.60, citing the company’s leadership in the digital transformation of the education sector. Deutsche Bank joined the coverage with a Buy rating and a price target of $18.00, emphasizing McGraw Hill’s role as a global provider of information solutions. BMO Capital rated McGraw Hill with an Outperform rating and set a price target of $24.00, recognizing the company’s strength in educational solutions. Lastly, Stifel initiated coverage with a Buy rating and a $19.00 price target, noting McGraw Hill’s successful transition to a digital platform-based business model. These recent developments reflect a positive outlook from multiple analyst firms on McGraw Hill’s future potential in the education industry.
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