📊 MH Key Takeaways
Is McGraw Hill, Inc. (MH) a Good Investment?
McGraw Hill exhibits fundamental weakness despite operational profitability, with stagnant revenue growth at +0.1% YoY and excessive leverage (3.53x D/E) that consumes nearly all earnings through interest expense, resulting in only 1.7% net margins and anemic returns (4.9% ROE, 0.6% ROA). Liquidity ratios below 1.0 combined with $2.6B debt burden create financial stress in a mature, non-growing publishing business.
McGraw Hill shows an attractive core business model with very high gross margins and strong free cash flow generation, indicating solid product economics and good cash conversion. However, that strength is offset by a heavily levered balance sheet, sub-1.0 liquidity ratios, and modest bottom-line profitability, which limits financial flexibility. Overall, the fundamentals support a neutral view until the company demonstrates stronger net earnings quality or meaningful deleveraging.
McGraw Hill, Inc. Key Strengths (MH)
- High gross margin of 80.9% demonstrates strong pricing power and content distribution efficiency
- Positive free cash flow of $246.3M with 11.7% FCF margin provides debt servicing capacity
- Operating margin of 13.2% shows underlying business generates profitability before financing costs
- Very high gross margin of 80.1%, suggesting strong pricing power and scalable content economics
- Free cash flow of $416.26M and a 25.4% FCF margin, indicating strong cash generation relative to revenue
- Positive operating profitability with $283.14M of operating income and an 17.3% operating margin
MH Stock Risks: McGraw Hill, Inc. Investment Risks
- Revenue growth stalled at +0.1% YoY indicating mature business with no expansion prospects
- Excessive leverage at 3.53x Debt/Equity with $2.6B long-term debt consuming most operational profits through interest expense
- Critical liquidity concerns with current ratio 0.77x and quick ratio 0.61x indicating potential short-term payment difficulties
- High leverage with $2.61B of long-term debt and debt-to-equity of 3.36x
- Weak short-term liquidity with a 0.83x current ratio and 0.70x quick ratio
- Low net margin of 5.2% and ROA of 1.5%, indicating limited bottom-line efficiency despite strong gross margins
Key Metrics to Watch
- Revenue growth trajectory and market demand for publishing services
- Debt reduction progress and interest coverage ratio sustainability
- Working capital trends and liquidity position to assess refinancing risk
- Debt reduction and debt-to-equity trend
- Net margin and operating cash flow conversion
McGraw Hill, Inc. (MH) Financial Metrics & Key Ratios
💡 AI Analyst Insight
The current ratio below 1.0x warrants monitoring of short-term liquidity.
MH Profit Margin, ROE & Profitability Analysis
MH vs Services Sector: How McGraw Hill, Inc. Compares
How McGraw Hill, Inc. compares to Services sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is McGraw Hill, Inc. Stock Overvalued? MH Valuation Analysis 2026
Based on fundamental analysis, McGraw Hill, Inc. shows some fundamental concerns relative to the Services sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
McGraw Hill, Inc. Balance Sheet: MH Debt, Cash & Liquidity
MH Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: McGraw Hill, Inc.'s revenue has remained relatively flat over the 5-year period, with a 0% decline. The most recent EPS of $-1.16 indicates the company is currently unprofitable.
MH Revenue Growth, EPS Growth & YoY Performance
MH Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2026 | $416.5M | $502.0K | $-0.11 |
| Q2 2026 | $669.2M | $502.0K | $0.57 |
| Q1 2026 | $523.0M | $502.0K | $0.00 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
McGraw Hill, Inc. Dividends, Buybacks & Capital Allocation
MH SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for McGraw Hill, Inc. (CIK: 0001951070)
📋 Recent SEC Filings
❓ Frequently Asked Questions about MH
What is the AI rating for MH?
McGraw Hill, Inc. (MH) has a Combined AI Grade of C from Claude (C) and ChatGPT (B) with 77% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are MH's key strengths?
Claude: High gross margin of 80.9% demonstrates strong pricing power and content distribution efficiency. Positive free cash flow of $246.3M with 11.7% FCF margin provides debt servicing capacity. ChatGPT: Very high gross margin of 80.1%, suggesting strong pricing power and scalable content economics. Free cash flow of $416.26M and a 25.4% FCF margin, indicating strong cash generation relative to revenue.
What are the risks of investing in MH?
Claude: Revenue growth stalled at +0.1% YoY indicating mature business with no expansion prospects. Excessive leverage at 3.53x Debt/Equity with $2.6B long-term debt consuming most operational profits through interest expense. ChatGPT: High leverage with $2.61B of long-term debt and debt-to-equity of 3.36x. Weak short-term liquidity with a 0.83x current ratio and 0.70x quick ratio.
What is MH's revenue and growth?
McGraw Hill, Inc. reported revenue of $2.1B.
Does MH pay dividends?
McGraw Hill, Inc. does not currently pay dividends.
Where can I find MH SEC filings?
Official SEC filings for McGraw Hill, Inc. (CIK: 0001951070) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is MH's EPS?
McGraw Hill, Inc. has a diluted EPS of $0.19.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined grade reflects both perspectives for balanced insights.
What is MH's fundamental grade?
Based on our AI fundamental analysis in June 2026, McGraw Hill, Inc. has a C grade with 77% confidence. Review the strengths and risks sections above for full context. This is not investment advice.
Is MH stock overvalued or undervalued?
Valuation metrics for MH: ROE of 4.9% (sector avg: 16%), net margin of 1.7% (sector avg: 10%). Compare these metrics with sector averages to assess valuation.
What is MH's AI grade for 2026?
Our dual AI analysis gives McGraw Hill, Inc. a combined C grade for 2026. Revenue is data pending, with profitability at or below sector average. Always conduct your own research.
What is MH's free cash flow?
McGraw Hill, Inc.'s operating cash flow is $331.2M, with capital expenditures of $84.9M. FCF margin is 11.7%.
How does MH compare to other Services stocks?
Vs Services sector averages: Net margin 1.7% (avg: 10%), ROE 4.9% (avg: 16%), current ratio 0.77 (avg: 1.5).
Is McGraw Hill, Inc. carrying too much debt?
MH has a debt-to-equity ratio of 3.53x, which is above the Services sector average of 0.7x. Combined with a current ratio below 1, this warrants careful monitoring of the balance sheet.