What Happened?
Shares of educational publishing and media company Scholastic (NASDAQ: SCHL) jumped 21.3% in the afternoon session after the company reported fourth-quarter financial results that beat Wall Street's expectations and provided strong guidance for the upcoming fiscal year.
The publishing and education company reported fourth-quarter adjusted earnings of 87 cents per share, which surpassed the analyst consensus estimate of 85 cents. Quarterly revenue also exceeded expectations, coming in at $508.3 million against a forecast of $494.58 million, marking a 7% increase from the prior year. Investors were further encouraged by the company's optimistic forecast for its fiscal year 2026. Scholastic provided guidance for revenue to grow between 2% and 4% and targeted significant growth in Adjusted EBITDA, a measure of operating profitability, to a range of $160 million to $170 million. This positive outlook, combined with the strong quarterly performance, fueled the stock's significant gain.
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What Is The Market Telling Us
Scholastic’s shares are very volatile and have had 20 moves greater than 5% over the last year. But moves this big are rare even for Scholastic and indicate this news significantly impacted the market’s perception of the business.
The biggest move we wrote about over the last year was 4 months ago when the stock gained 15.2% on the news that the company delivered strong first-quarter (fiscal Q3 2025) results, with profits significantly exceeding expectations as both EPS and EBITDA outperformed Wall Street's estimates.
A key driver of this performance was the continued strength in Children's Book Publishing and Distribution, which saw a 5% increase in sales, largely driven by growth in Book Fairs and Book Clubs. However, challenges persisted in Education Solutions, where sales declined 16% due to ongoing weakness in the supplemental curriculum market. This segment's struggles contributed to the company's softer revenue growth, with overall sales missing expectations and full-year EBITDA guidance falling short of forecasts. Still, we think this was a decent quarter featuring some areas of strength but also some blemishes.
Scholastic is up 24.1% since the beginning of the year, but at $26.23 per share, it is still trading 18.1% below its 52-week high of $32.04 from September 2024. Investors who bought $1,000 worth of Scholastic’s shares 5 years ago would now be looking at an investment worth $1,031.
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