MH Stock Forecast & Price Target

McGraw Hill Inc. is poised for growth, with recurring revenue expectations revised upward to $1,504-$1,524 million, indicating a positive trajectory compared to previous forecasts. The recent data showing a 2.4% year-over-year increase in higher education enrollment, alongside a significant market share gain of approximately 200 basis points in the K-12 segment, illustrates the company's strengthened competitive positioning. Additionally, the anticipated rise in Adjusted EBITDA margins to the upper-30s, driven by enhanced operational efficiencies from AI tools, further supports a favorable outlook for McGraw Hill's financial performance.

McGraw Hill's recent financial outlook is negatively impacted by declining enrollment trends, particularly in the Higher Education segment, which is more discretionary and sensitive to shifts in student numbers. The company faces several risks that may adversely affect revenue, including potential reductions in education funding, increasing competition from generative artificial intelligence, and the transition to upfront payments for multi-year licenses, which could strain cash flow. Additionally, the ongoing challenges in the Global Professional segment due to the reduction of non-core print titles further contribute to uncertainties about McGraw Hill's market positioning and overall financial stability.