# Pearson plc (PSON.L) fundamentals

Data as of 2026-09-08. LSE, United Kingdom. Sector: Communication Services / Diversified Telecommunication Services. Price 1163p, market value 7.0 billionp.

## Valuation
- **P/E (trailing): 23.3×** (5-yr avg 2283.5×, 3-yr avg 1970.3×). Pearson plc trades at 23.3× trailing earnings, well below its own five-year average of 2283.5×: cheap by its own standards. The Communication Services median in the September 2026 study was 21.1×. Forward P/E is 14.8×, lower than trailing, so analysts expect earnings to grow.
- **Price / sales: 1.0×**. Each dollar of revenue is priced at 1.0×, a low multiple typical of thin-margin businesses or out-of-favour stocks.
- **Price / book: 2.1×**. The shares trade at 2.1× book value; book value is a meaningful part of the valuation.
- **EV / EBITDA: 4.1×**. Enterprise value is 4.1× operating earnings before depreciation, the multiple that ignores how the company is financed; below 8× is inexpensive for most sectors.
- **Free-cash-flow yield: 22.1%** (5-yr avg 0.1%). Free cash flow equals 22.1% of the market value, above its five-year average of 0.1%, so the shares are cheaper on cash than they have usually been. Above 5% is generally attractive.
- **Earnings yield: 4.3%**. The inverse of the P/E: 4.3% of the price is earned each year.

## Profitability
- **Gross margin: 51.5%**. Pearson plc keeps 51.5% of revenue after the direct cost of what it sells.
- **Operating margin: 14.7%**. 14.7% of revenue is left after running the business.
- **Net margin: 9.4%**. 9.4% of each dollar of sales reaches the bottom line.
- **Return on equity: 9.2%**. 9.2% on shareholders' equity is weak; the business earns little on the capital its owners have in it.
- **Return on invested capital: 17.4%**. Return on all capital, debt included, is 17.4%: comfortably above what that capital costs.
- **Return on assets: 11.9%**. Each dollar of assets produces 11.9% of profit.

## Growth
- **Revenue growth (1 yr): 0.7%** (3-yr -2.3%/yr, 5-yr 1.0%/yr). Revenue grew 0.7% over the last year, against 1.0% a year compounded over five years: growth is slowing.
- **EPS growth (1 yr): -19.0%** (3-yr 15.6%/yr, 5-yr 4.5%/yr). Earnings per share fell 19.0%, slower than revenue, so margins compressed.
- **Free-cash-flow growth (3 yr): 29.6%/yr**. Free cash flow has compounded at 29.6% a year over three years, keeping pace with earnings: the growth is real cash.

## Financial health
- **Debt to equity: 0.41**. Debt is 0.41 times equity: a conservative balance sheet.
- **Net debt / EBITDA: 0.6×**. It would take 0.6 years of operating earnings to repay net borrowings, within the comfortable range.
- **Interest coverage: 5.0×**. Operating profit covers interest 5.0× over, a safe margin.
- **Current ratio: 2.00** (quick 1.94). Current assets cover the next year's liabilities 2.00 times.
- **Altman Z-score: 3.38**. A Z-score of 3.38 places the company in the safe zone for bankruptcy risk.
- **Piotroski F-score: 6/9**. 6 of 9 checks pass: mixed.

## Dividends
- **Dividend yield: 2.17%** (0p per share, trailing). Pearson plc yields 2.17%, a modest yield more typical of a growth-oriented payer.
- **Payout ratio: 48%** (20% of free cash flow). 48% of earnings goes out as dividends, leaving room to keep raising it.
- **Consecutive years of increases: 7**. 7 straight years of increases.
- **Dividend growth (5 yr): 4.6%/yr** (1-yr 5.6%). The dividend has grown 4.6% a year over five years.
- **Shareholder yield: 13.1%**. Dividends plus net buybacks return 13.1% of the market value a year.

## Analyst view
- **Analyst consensus: hold** (11 analysts). 11 analysts cover Pearson plc; the consensus is hold, with an average price target of 1239p (+7% from the current price). Analyst opinion is shown for context; it is not part of the Fundamental Score.

## Price and momentum
- **Total return (1 yr): 12.6%** (YTD 12.2%, 3-mo 1.4%). The shares are up 12.6% over twelve months including dividends.
- **From 52-week high: -13.0%** (32.9% above the low). Trading 13% below its 52-week high.
- **200-day average: above**. The price sits above its 200-day moving average, the usual definition of an uptrend.
- **RSI (14-day): 40**. An RSI of 40 is neutral.
- **Beta (1 yr): 0.28** (volatility 25%). Beta of 0.28 against the FTSE All-Share: the shares move much less than the market.

Live score and charts: https://foliofundamentals.com/analyzer?s=PSON.L · Page: https://foliofundamentals.com/stocks/pson.l

Not investment advice.