MH Should I Buy
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McGraw Hill Inc is not a strong buy for a beginner, long-term investor at this moment. While the company has positive catalysts such as raised revenue guidance and strong AI positioning, its declining net income and EPS, alongside bearish technical indicators, suggest caution. The lack of significant trading signals and neutral sentiment from hedge funds and insiders further supports a hold recommendation.
The technical indicators are bearish. The MACD histogram is below 0 and negatively contracting, the RSI is neutral at 63.085, and the moving averages indicate a bearish trend (SMA_200 > SMA_20 > SMA_5). The stock is trading below key resistance levels (R1: 15.191, R2: 16.107) and above support levels (S1: 12.227, S2: 11.311).
Raised fiscal 2026 revenue and adjusted EBITDA guidance. Strong AI positioning supported by proprietary content and adaptive learning technologies. Positive analyst sentiment with Goldman Sachs and Morgan Stanley maintaining Buy/Overweight ratings and price targets of $22 and $21, respectively.
Bearish technical indicators and lack of significant trading trends from hedge funds and insiders.
In Q3 FY2026, revenue increased by 4.24% YoY to $434.2 million, but net income dropped significantly by 61.84% YoY to -$20.2 million. EPS also declined by 60.71% YoY to -0.11. Gross margin improved slightly to 66.24%, up 0.59% YoY.
Analysts remain positive on McGraw Hill. Goldman Sachs lowered its price target to $22 from $25 but maintained a Buy rating, citing strong K-12 revenue growth and AI positioning. Morgan Stanley raised its price target to $21 from $20 and kept an Overweight rating, emphasizing the importance of AI in the company's future growth.
