MH Stock Forecast & Price Target

McGraw Hill Inc. is experiencing a positive financial trajectory, evidenced by an expected increase in recurring revenue to a range of $1,504-$1,524 million, marking an improvement from previous estimates. Additionally, higher education enrollment has seen a healthy year-over-year growth of 2.4%, particularly strong at community colleges, where McGraw Hill has substantial market presence. The company has revised its fiscal year 2026 revenue and Adjusted EBITDA guidance upward, signaling enhanced operational efficiencies and market share gains across its segments, particularly in K-12 education and Higher Education.

McGraw Hill faces significant challenges that contribute to a negative outlook on its stock, particularly in the Higher Education segment, which is more sensitive to enrollment trends that have worsened compared to expectations. Additionally, key risks include the potential for decreased demand due to changes in education funding, adoption of Open Educational Resources, and competition from generative artificial intelligence in instructional materials. The company's ability to convert EBITDA to free cash flow satisfactorily and the effects of high workforce turnover further exacerbate the uncertainty surrounding its financial performance and market position.