Scholastic Corporation Just Beat Earnings Expectations: Here's What Analysts Think Will Happen Next

Scholastic Corporation (NASDAQ:SCHL) shareholders are probably feeling a little disappointed, since its shares fell 8.1% to US$27.00 in the week after its latest second-quarter results. The result was positive overall - although revenues of US$551m were in line with what the analysts predicted, Scholastic surprised by delivering a statutory profit of US$2.17 per share, modestly greater than expected. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

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Following last week's earnings report, Scholastic's two analysts are forecasting 2026 revenues to be US$1.62b, approximately in line with the last 12 months. Earnings are expected to improve, with Scholastic forecast to report a statutory profit of US$1.87 per share. Before this earnings report, the analysts had been forecasting revenues of US$1.65b and earnings per share (EPS) of US$0.72 in 2026. Although the revenue estimates have not really changed, we can see there's been a sizeable expansion in earnings per share expectations, suggesting that the analysts have become more bullish after the latest result.

See our latest analysis for Scholastic

The average the analysts price target fell 10.0% to US$36.00, suggesting thatthe analysts have other concerns, and the improved earnings per share outlook was not enough to allay them.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Scholastic's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Scholastic's revenue growth will slow down substantially, with revenues to the end of 2026 expected to display 0.3% growth on an annualised basis. This is compared to a historical growth rate of 4.1% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 3.5% annually. Factoring in the forecast slowdown in growth, it seems obvious that Scholastic is also expected to grow slower than other industry participants.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Scholastic's earnings potential next year. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Scholastic's revenue is expected to perform worse than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At least one analyst has provided forecasts out to 2027, which can be seen for free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with Scholastic (at least 1 which is a bit unpleasant) , and understanding them should be part of your investment process.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.