John Wiley & Sons (WLY, Financial) shares experienced a drop of 8.65% following the release of its fiscal Q1 2025 earnings report. The earnings missed analyst expectations, which led investors to react negatively.
Analysts had anticipated earnings of $0.55 per share on $387.4 million in revenue. However, Wiley's earnings fell short at $0.47 per share, despite higher-than-expected sales of $403.8 million. The reported $0.47 profit was a non-GAAP figure. Using GAAP metrics, Wiley recorded a $0.03 per share loss, an improvement from the prior year's $1.67 per share Q1 loss. CEO Matthew Kissner highlighted a 3% growth in the research publications division and a 14% sales boost in academic courseware, attributed to generative artificial intelligence. However, the professional learning division saw a 1% sales decline, contributing to an overall sales drop of 10.5%.
Wiley forecasts about 3% total sales growth for fiscal 2025, with both divisions expected to grow at least in the low single digits, and research potentially in the mid-single digits. Adjusted earnings are projected to rise approximately 23% to $3.42 per share, and free cash flow may grow around 10% to $125 million.
From a valuation standpoint, John Wiley & Sons (WLY, Financial) has a mix of warning signs and positive indicators. The company has seven medium warning signs, such as an Altman Z-score of 1.93, which is in the grey area indicating some financial stress. Additionally, the stock's Price-to-Book (PB) Ratio is close to a 10-year high at 3.2, and its revenue per share has been in decline over the past 12 months.
Wiley's stock also shows no severe warning signs, and it has one good sign: the Beneish M-Score of -2.85 suggests that the company is unlikely to be a manipulator. The GF Value for WLY is 38.68, indicating that the stock might be modestly overvalued. For a more detailed valuation, you can visit the GF Value page.
The stock currently trades at $43.53, with a market cap of $2.362 billion. Its enterprise value stands at $3.391 billion. Over the past year, Wiley has seen a 27.65% price change, demonstrating some positive momentum despite recent declines.
John Wiley & Sons (WLY, Financial) presents a complex investment case. While the company's financials show some areas of concern, the improvement in GAAP metrics and growth in key divisions suggest potential for recovery and growth. Investors should consider these factors when evaluating the stock's future performance.
