Pearson plc
About the company
Pearson plc provides educational courseware, assessments, and services in the United Kingdom, the United States, Canada, the Asia Pacific, other European countries, and internationally. It operates through five segments: Assessment & Qualifications, Virtual Learning, English Language Learning, Enterprise Learning & Skills, and Higher Education. The Assessment & Qualifications segment offers pearson professional assessments, US student assessment, clinical assessment, UK GCSE, and A levels and international academic qualifications and associated courseware, including the English-speaking Canadian and Australian K-12 businesses, and PDR. The Virtual Learning segment provides virtual schools and online program management. The English Language Learning segment offers Pearson test of English, institutional courseware, and English online solutions. The Enterprise Learning & Skills segment provides vocational qualifications, GED, TalentLens, Faethm, Credly, Pearson College, and Enterprise content and training. The Higher Education segment engages in the US, Canadian, and international higher education courseware businesses. Pearson plc was founded in 1844 and is headquartered in London, the United Kingdom.
Price below modeled range
5-year outlook: Not shown because confidence is low: Earnings-based DCF disagrees strongly.
Why: Free cash flow is positive and in line with earnings, and the dividend is small, so a cash-flow DCF fits best.
The range depends on model assumptions and data; it is not a prediction or investment advice.
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Market price below modeled range
Showing the EV/Sales (Rule of 40) you selected on the company card, using 4.7% growth, 2.9% terminal growth and 10.4% discount. The range varies these assumptions slightly; it is illustrative, not investment advice. Low confidence: the modelled value is far from the market price, which usually means the model does not capture this company well (for example expected growth well above its history).
Assumptions: growth 4.70%, discount rate 10.40%, terminal growth 2.90% (sector defaults). See a worked example.
Blended growth assumption: 4.7% (sector default 7.0%, own revenue history 1.1%, analyst revenue consensus 5.4%).
Analyst consensus expects revenue growth of 5.4% a year; the growth assumption used is 4.7%.
Adjust assumptions
Show the recommended model instead
Why this model: Free cash flow is positive and in line with earnings, and the dividend is small, so a cash-flow DCF fits best.
Compare models- Recommended: Free-cash-flow DCF — GBP 13.08 (+1.0%)
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EPS-based Gordon proxy
— GBP 6.96 (-46.2%)
Not used: Treats all earnings as if paid out and ignores the cash kept for reinvestment, so it overstates value for companies that retain most profit.
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DCF (trailing free cash flow)
— GBP 13.08 (+1.0%)
Not used: Not chosen: Free-cash-flow DCF ranks ahead of it for this company.
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FCFF (steady state)
— GBP 12.00 (-7.4%)
Not used: Assumes only the long-run terminal growth rate from today, so it ignores the near-term growth expected.
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EV/EBITDA (12x)
— GBP 18.74 (+44.7%)
Not used: Used only when free cash flow is far below earnings even after averaging three years; a fixed 12x multiple also ignores sector differences.
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Fade DCF (10-year growth fade)
— GBP 13.04 (+0.7%)
Not used: An alternative growth path (fading over 10 years) shown for comparison; the automatic choice does not use it.
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EV/Sales (Rule of 40)
— GBP 37.49 (+189.5%)
Not used: Used only when cash-flow models land far below the price; here they do not.
| Bear GBP 27.68 | 53.2% |
| Base GBP 37.49 | 65.5% |
| Bull GBP 47.30 | 72.6% |
Margin = (value − price) / value, so it is measured against the value and reads lower than the upside to value, which is measured against the price. Positive means the price is below that case.
Track record: see the methodology page for how this model has performed historically, including its limits. Treat it as a screen, not a forecast.
Price history and fair value
5 years price change: +115.88% · GBP 12.95 · Market data through 06 Nov 2026 ; dashed line is today’s model base value (GBP 37.49). The fair value is today’s estimate, not what the model said in the past.
Saved price history is current through 06 Nov 2026; last refreshed 06 Nov 2026 18:33 (1 hour, 52 minutes ago).
08 Nov 2021Range GBP 5.88 – 13.7806 Nov 2026
Latest news
Headlines provided by EODHD. Articles may mention multiple companies and are not investment recommendations.
More detail: quality, peers, price history, dividends and financials
Quality score: 92 / 100
Five equal checks on reported history: profitability, cash generation, revenue growth, balance sheet and margins. It describes business quality, not whether the price is attractive.
| Profitability | 5 of 5 years profitable | 20 / 20 |
| Cash generation | free cash flow positive in 5 of 5 years | 20 / 20 |
| Growth | revenue +1.1% a year | 12 / 20 |
| Balance sheet | net debt 1.0x EBITDA | 20 / 20 |
| Margins | EBITDA margin 32% | 20 / 20 |
Peers in Communication Services
Same-sector companies with a valuation, most undervalued first. Compare the margin of safety, yield and quality score side by side.
| Company | Price | Margin of safety | P/E | P/B | Yield | Quality |
|---|---|---|---|---|---|---|
| PSON.L (this company) | GBP 12.95 | 1.0% | 25.5 | 2.3 | 1.9% | 92 |
| DTE.DE Deutsche Telekom AG | EUR 25.91 | 49.6% | 14.4 | 2.1 | 5.5% | 82 |
| VOD.L Vodafone Group Public Limited Company | GBP 1.17 | 42.0% | – | 0.7 | 3.2% | 66 |
| PUB.PA Publicis Groupe S.A. | EUR 102.95 | 41.8% | 15.8 | 2.5 | 3.5% | 90 |
| CMCSA Comcast | USD 24.95 | 39.1% | 7.9 | 1.0 | 5.4% | 82 |
| TEF.MC Telefonica, S.A. | EUR 3.38 | 33.4% | – | – | 8.9% | 59 |
| INF.L Informa plc | GBP 8.37 | 23.3% | – | 1.9 | 2.4% | 66 |
| SONY Sony Group Corporation | USD 27.54 | 19.5% | – | – | – | 82 |
| EMBRAC-B.ST Embracer Group AB | SEK 95.66 | 18.3% | – | 1.0 | – | 56 |
| Peer median | 14.4 | 1.5 | ||||
Dividends
Paid in the last 12 months: GBP 0.00 per share · yield 0.02% at the current price.
| Year | Dividends per share |
|---|---|
| 2026 (so far) | 0.003 |
| 2025 | 0.002 |
| 2024 | 0.002 |
| 2023 | 0.002 |
| 2022 | 0.002 |
| 2021 | 0.002 |
Annual financial statement
Saved annual report · Fiscal year 2025 · EODHD annual statements · period ended 31 Dec 2025
| Revenue | GBP 3,577,000,000 |
|---|---|
| EBITDA | GBP 1,127,000,000 |
| EBIT | GBP 632,000,000 |
| Net income | GBP 335,000,000 |
| Free cash flow | GBP 661,000,000 |
| Capital expenditures | GBP 29,000,000 |
| Debt | GBP 1,481,000,000 |
| Cash | GBP 333,000,000 |
| Working capital | GBP 1,159,000,000 |
| Shares outstanding | 660,300,000 |
| Reported dividends per share | GBP 0.2423 |