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PSO

NEUTRAL
$15.08 Live
Pearson plc · NYSE
Target $14.05 (-6.8%)
$12.02 52W Range $16.67

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AI Analysis

AI-powered fundamental assessment

Confidence
85%
Pearson plc demonstrates strong operational health with a Piotroski F-Score of 7/9 and a robust balance sheet characterized by low leverage. However, the stock is significantly overvalued from a deterministic standpoint, trading well above its Graham Number ($10.87) and Intrinsic Value ($4.83). This valuation gap is exacerbated by a high PEG ratio of 4.07 and negative earnings growth (-35.70%). While the company is financially stable, the current price of $15.08 exceeds the analyst target of $14.05, suggesting limited immediate upside.

Key Strengths

Strong Piotroski F-Score (7/9) indicating high operational health
Conservative leverage with a Debt/Equity ratio of 0.41
Strong liquidity position with a Current Ratio of 2.00
Healthy gross margins of 52.00%
Sustainable dividend payout ratio of 49.06%

Key Risks

Severe overvaluation relative to Intrinsic Value ($4.83) and Graham Number ($10.87)
Significant negative earnings growth (-35.70% YoY)
High PEG ratio (4.07) suggesting price is not supported by growth
Bearish technical trend (0/100)
Current price is trading above the analyst mean target of $14.05
AI Fair Value Estimate
Based on comprehensive analysis
$11.25
-25.4% below current price

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