Is MH a good stock to buy? We came across a bullish thesis on McGraw Hill, Inc. on r/ValueInvesting by Icy_Abbreviations167. In this article, we will summarize the bulls’ thesis on MH. McGraw Hill, Inc.’s share was trading at $9.68 as of June 18th. MH’s trailing and forward P/E were 50.95 and 9.50 respectively according to Yahoo Finance.
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McGraw Hill, Inc., doing business as McGraw Hill, provides education solutions for K-12, higher education, and professional learning in the United States and internationally. MH is increasingly positioning itself as an AI-enabled education platform rather than a traditional textbook publisher, with its latest fiscal Q4 FY2026 results reinforcing a shift toward higher-quality recurring revenues, expanding margins, and improving capital efficiency.
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The company reported revenue of $463.7 million versus $441.2 million expected, while adjusted EPS of $0.31 significantly beat estimates of $0.15, reflecting strong operational leverage despite a modest 2% year-over-year revenue decline and near-flat full-year growth of 0.1% to $2.10 billion.
The core transformation narrative is driven by a structural mix shift, with recurring revenue rising 5.8% to $1.54 billion and now comprising over 73% of total sales, while digital revenue grew 5.5% to $1.43 billion, underscoring accelerating platform adoption. Profitability improved meaningfully as adjusted EBITDA reached $744.3 million with margins expanding to 35.4%, while net income turned positive at $35.3 million compared to a prior-year loss of $85.8 million, signaling a durable earnings inflection.
The company also highlighted strong ecosystem scale with over 100 million student and educator licenses, 7.5 million users engaging with AI-enabled tools, and more than 25 billion learning interactions across its platforms, providing a data advantage for its emerging agentic AI initiatives tied to its precision education model.
Management is further reinforcing shareholder returns through $645.6 million in gross debt reduction and a newly authorized $50 million share repurchase program, improving balance sheet resilience. Overall, McGraw Hill is transitioning into a higher-margin, AI-driven recurring revenue compounder with improving financial quality and optionality from agentic AI deployment story.
Previously, we covered a bullish thesis on Stride, Inc. (LRN) by Technical-Industry22 in October 2024, which highlighted online education growth, acquisitions, and AI-driven personalized learning potential. LRN’s stock price has appreciated by approximately 28.39% since our coverage. Icy_Abbreviations167 shares a similar view but emphasizes AI-enabled transformation, recurring revenue expansion, and margin improvement.
McGraw Hill, Inc. is not on our list of the 40 Most Popular Stocks Among Hedge Funds. As per our database, 21 hedge fund portfolios held MH at the end of the first quarter which was 15 in the previous quarter. While we acknowledge the risk and potential of MH as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than MH and that has 10,000% upside potential, check out our report about this cheapest AI stock.
Disclosure: None.
