Fact based stock research
Pearson (LSE:PSON)

GB0006776081

How to read the free ranks

For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

Pearson stock research in summary

pearson.com

ANALYSIS: With an Obermatt Combined Rank of 37 (worse than 63% compared with investment alternatives), Pearson (Education Services, United Kingdom) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Pearson are low in value (priced high) with a consolidated Value Rank of 28 (worse than 72% of alternatives) and show below-average growth (Growth Rank of 20) but are safely financed (Safety Rank of 92), which means low debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 37, is a hold recommendation based on Pearson's financial characteristics. As the company Pearson's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 28) and low growth (Obermatt Growth Rank of 20), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. In this case, good financing practices (Obermatt Safety Rank of 92) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	n/a
Growth Rank	n/a
Safety Rank	n/a
Combined Rank	n/a

Country	United Kingdom
Industry	Education Services
Index	FTSE All Shares, FTSE 100, FTSE 350, Diversity Europe, Human Rights, Multimedia, Renewables Users
Size class	X-Large

This stock has achievements: Top 10 Stock.

. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

Alternative to SMI? Experts Share Their Swiss Investment Strategies

Dr. Hermann Stern, founder and chair of Obermatt, provides insight into the methodology and background of the method, while Daniel Grob, partner at Amasus, shows how the method is made investable for customers. Be there to gain exciting insights and new perspectives. (event held in German)

Multiple opinions. One number.

Analysts rarely agree on a stock’s future. So, who do you believe? Obermatt translates those collective views into a single Sentiment Rank. That plus the financial ranks give you the ultimate 360° View. Sign up to access them.

Why popular stocks have low ratings

It’s easier said than done. When your stock drops, it’s easy to want to sell it and find a better performer. Think twice, or even three times, before trading. Those fees (especially the hidden ones) can eat up your gains.

Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Pearson

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	80	82	44	n/a
GROWTH
GROWTH	17	13	15	n/a
SAFETY
SAFETY	79	92	90	n/a
SENTIMENT
SENTIMENT	n/a	76	58	^new
360° VIEW
360° VIEW	n/a	86	57	^new

Most recent update of the stock research: . Financial reporting date used for calculating ranks: . Stock research history is based on the Obermatt Method. The higher the rank, the better Pearson is in the corresponding investment strategy.
Upgrade to a Premium Account to access the latest ranks.

Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	80	82	44	n/a
GROWTH
GROWTH	17	13	15	n/a
SAFETY
SAFETY	79	92	90	n/a
COMBINED
COMBINED	74	78	49	n/a

Last update of combined financial performance: . Stock analysis on combined financial performance: The higher the rank of Pearson the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 28 (worse than 72% compared with alternatives), Pearson shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators where three out of four are below average for Pearson. Only the Price-to-Book Capital ratio (also referred to as market-to-book ratio) indicates good stock value with a Price-to-Book Rank of 54, which means that the stock price is lower compared with invested capital than for 54% of comparable investments. All other value indicators are below the market median. Price-to-Sales is 25 which means the stock price compared with what market professionals expect for future profits is higher than 75% of comparable companies, indicating a low value concerning Pearson's revenue levels. The same is valid for the Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Book Rank of 54 and for the dividend yields rank which is lower than for 56% of comparable companies, making the stock more expensive as regards to with the company's expected dividend payouts. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 28, is a hold recommendation based on Pearson's stock price compared with the company's operational size and dividend yields. Why are market participants paying such a high price for Pearson, where three out of four value indicators are below par? One reason could be that the company is well financed, indicated by the high book capital level, and has a promising future that is not yet visible in reported revenues and profits. That would also explain the low dividend yield because the company needs the cash to invest in its future. If investors can verify a picture in this sense, the stock may still be a good investment, even though current company-reported financials don't fully explain current stock prices. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	45	62	33	n/a
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	50	74	39	n/a
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	76	85	63	n/a
DIVIDEND YIELD
DIVIDEND YIELD	84	61	57	n/a
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	80	82	44	n/a

Last update of Value Rank: . Stock analysis on value ratios: The higher the rank, the lower the value ratio of Pearson; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 20 (better than 20% compared with alternatives), Pearson shows one of the most restricted growth dynamics in its industry. There is little momentum in this company. The Growth Rank is based on consolidating four value indicators, with all four metrics below average for Pearson. Sales Growth has a rank of 17, which means that currently professionals expect the company to grow less than 83% of its competitors. The same is valid for Profit Growth, with a rank of 42, and Capital Growth with 36. In addition, Stock Returns have a below market rank of 42, which means that the stock returns have recently been below 58% of alternative investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 20, is a sell recommendation for growth and momentum investors. These are all bad growth momentum indicators. These are negative signals for investors interested in growth companies. Value is likely good for this company, as investors may have left this stock in the cold. If that is the case, investors should look at the company's outlook, especially Sentiment performance, because it may be a turnaround situation that could entail above-average stock returns in the future. But it remains a risky bet, as no growth signals are in the green zone yet. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is low here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	18	20	15	n/a
PROFIT GROWTH
PROFIT GROWTH	82	34	43	n/a
CAPITAL GROWTH
CAPITAL GROWTH	n/a	42	21	n/a
STOCK RETURNS
STOCK RETURNS	28	27	33	n/a
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	17	13	15	n/a

Last update of Growth Rank: . Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Pearson.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 92 (better than 92% compared with alternatives) for 2025, the company Pearson has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of Pearson is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, where all three are above average for Pearson. Leverage is at 79, meaning the company has a below-average debt-to-equity ratio. It has less debt than 79% of its competitors. Refinancing is at a rank of 86, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 86% of its competitors. Finally, Liquidity is also good at a rank of 73, which means that the company generates more profit to service its debt than 73% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 92 (better than 92% compared with alternatives), Pearson has a financing structure that is significantly safer than that of its competitors. These three positive financing indicators signal that the company is less likely to default on its debt obligations. However, it also means that its shareholder returns will be more modest if things go well. A low safety means fewer troubles in downtimes and less upside in good times. Investors may not have a debt issue with Pearson but they should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	48	77	81	n/a
REFINANCING
REFINANCING	96	97	86	n/a
LIQUIDITY
LIQUIDITY	76	64	75	n/a
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	79	92	90	n/a

Last update of Safety Rank: . Stock analysis on safety metrics: The higher the rank, the lower the leverage of Pearson and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	21	26	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	29	40	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	96	63	^new
MARKET PULSE
MARKET PULSE	n/a	80	75	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	76	58	^new

Last update of Sentiment Rank: . Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Pearson.
Upgrade to a Premium Account to access the latest ranks.