📊 MH Key Takeaways
Is McGraw Hill, Inc. (MH) a Good Investment?
McGraw Hill demonstrates solid operational performance with strong profitability metrics (80.1% gross margin, 17.3% operating margin) and robust free cash flow generation ($416.3M, 25.4% FCF margin). However, the company carries significant leverage (3.36x Debt/Equity) with weak liquidity ratios (0.83x current, 0.70x quick), creating financial vulnerability despite strong cash generation.
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.
Why Buy McGraw Hill, Inc. Stock? MH Key Strengths
- Exceptional gross margin of 80.1% indicating strong pricing power and operational efficiency
- Substantial free cash flow of $416.3M with 25.4% FCF margin provides capital flexibility
- High operating margin of 17.3% demonstrates effective cost control and scale benefits
- Substantial cash balance of $514.4M provides liquidity buffer
- 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
- Elevated leverage ratio of 3.36x Debt/Equity with $2.6B long-term debt creates financial distress risk
- Weak liquidity position with current ratio of 0.83x and quick ratio of 0.70x below healthy thresholds
- Low net margin of 5.2% despite high gross margins suggests elevated operating expenses or interest burden
- Limited visibility on revenue and earnings growth trends (N/A YoY data)
- 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
- Debt/Equity ratio trend and debt repayment progress
- Current and quick ratios improvement trajectory
- Year-over-year revenue and net income growth rates
- Operating cash flow sustainability and free cash flow conversion
- Interest coverage ratio and debt service capacity
- 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 25.4% free cash flow margin provides substantial flexibility for dividends, buybacks, and strategic investments. 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. has mixed fundamental signals 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 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 Rating of HOLD from Claude (HOLD) and ChatGPT (HOLD) with 70% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are MH's key strengths?
Claude: Exceptional gross margin of 80.1% indicating strong pricing power and operational efficiency. Substantial free cash flow of $416.3M with 25.4% FCF margin provides capital flexibility. 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: Elevated leverage ratio of 3.36x Debt/Equity with $2.6B long-term debt creates financial distress risk. Weak liquidity position with current ratio of 0.83x and quick ratio of 0.70x below healthy thresholds. 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 $1.6B.
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 $0.47.
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 rating reflects both perspectives for balanced insights.
Is MH a good stock to buy right now?
Based on our AI fundamental analysis in April 2026, McGraw Hill, Inc. has a HOLD rating with 70% confidence. Review the strengths and risks sections above before making a decision. This is not investment advice.
Is MH stock overvalued or undervalued?
Valuation metrics for MH: ROE of 11.0% (sector avg: 16%), net margin of 5.2% (sector avg: 10%). Compare these metrics with sector averages to assess valuation.
Should I buy MH stock in 2026?
Our dual AI analysis gives McGraw Hill, Inc. a combined HOLD rating 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 $477.3M, with capital expenditures of $61.0M. FCF margin is 25.4%.
How does MH compare to other Services stocks?
Vs Services sector averages: Net margin 5.2% (avg: 10%), ROE 11.0% (avg: 16%), current ratio 0.83 (avg: 1.5).
Is McGraw Hill, Inc. carrying too much debt?
MH has a debt-to-equity ratio of 3.36x, 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.