Pearson PLC (PSO) intrinsic value & 10-year financials
Pearson PLC (PSO) has a Graham intrinsic value of £3.89 per share. Over the last 10 fiscal years revenue shrank 2.6% a year to £3.6B, with an average return on invested capital of 2.3%.
- Graham intrinsic value
- £3.89
- Revenue (FY2025)
- £3.6B
- Revenue growth (10-yr CAGR)
- -2.6%
- ROIC (10-yr avg)
- 2.3%
- Free cash flow (FY2025)
- —
PSO 10-year financial history
| Fiscal year | Revenue | Net income | EPS (diluted) | Free cash flow | Operating margin | ROIC |
|---|---|---|---|---|---|---|
| FY2025 | £3.6B | £336.0M | £0.51 | — | 14.2% | 7.6% |
| FY2024 | £3.6B | £435.0M | £0.64 | — | 15.2% | 9.4% |
| FY2023 | £3.7B | £380.0M | £0.53 | — | 13.6% | 7.7% |
| FY2022 | £3.8B | £244.0M | £32.60 | — | 7.1% | 4.2% |
| FY2021 | £3.4B | £160.0M | £0.21 | £262.0M | 5.3% | 3.9% |
| FY2020 | £3.4B | £310.0M | £41.00 | £336.0M | 12.1% | 7.0% |
| FY2019 | £3.9B | £266.0M | £34.00 | £314.0M | 7.1% | 5.4% |
| FY2018 | £4.1B | £590.0M | £0.76 | £392.0M | 13.4% | 11.9% |
| FY2017 | £4.5B | £408.0M | £0.50 | £216.0M | 10.0% | 8.8% |
| FY2016 | £4.6B | -£2.3B | -£2.87 | £322.0M | -54.9% | -42.6% |
Source: annual 10-K filings on SEC EDGAR. Figures in GBP.
Executive summary
PEARSON PLC is facing top-line stagnation, with revenue contracting over the decade.
PEARSON PLC has historically struggled to out-earn its cost of capital, averaging just 2.3% ROIC.
Over the decade, PEARSON PLC shows that management has aggressively returned capital to shareholders by retiring 20.1% of outstanding shares.
Benjamin Graham lens
Under Benjamin Graham's formula using SEC EDGAR fundamentals, PEARSON PLC is modeled at 0.2% normalized earnings growth with a 5.1% bond-yield adjustment. The resulting Graham intrinsic value estimate is $3.89 per share.