Pearson plc (PSO) Financial Ratios
30 years of historical data (1995–2024) · Communication Services · Publishing
EV/EBITDA
↑
7.56
↓-23% vs avg
5yr avg: 9.75
30Y Low7.5·High67.2
P/FCF
↓
14.18
↓-50% vs avg
5yr avg: 28.25
30Y Low14.6·High121.1
P/B Ratio
↑
1.90
-5% vs avg
5yr avg: 2.00
30Y Low1.4·High53.1
ROE
↑
10.8%
↓+44% vs avg
5yr avg: 7.5%
30Y Low-43%·High70%
Debt/EBITDA
↓
1.38
↓-10% vs avg
5yr avg: 1.53
30Y Low0.6·High20.2
Percentile shows where the current value sits in 30-year historical distribution. Sparklines show 5-year trend.
PSO Valuation Multiples
Price-based multiples — how expensive the stock is relative to earnings, sales, book value, and cash flow
Pearson plc trades at 17.9x earnings, 37% below its 5-year average of 28.4x, sitting at the 20th percentile of its historical range. Compared to the Communication Services sector median P/E of 15.3x, the stock trades at a premium of 17%. On a free-cash-flow basis, the stock trades at 14.2x P/FCF, 50% below the 5-year average of 28.2x.
| Metric | TTM | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 | FY 2015 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Market Cap | $9.4B | $11.0B | $8.8B | $8.4B | $6.4B | $6.9B | $6.6B | $9.3B | $8.0B | $8.1B | $8.8B |
| Enterprise Value | $10.6B | $12.0B | $9.7B | $9.0B | $6.8B | $7.5B | $7.8B | $9.4B | $8.6B | $9.1B | $9.4B |
| P/E Ratio → | 17.91 | 25.59 | 23.19 | 34.15 | 36.52 | 22.39 | 24.79 | 15.71 | 19.64 | — | 10.67 |
| P/S Ratio | 2.01 | 3.10 | 2.40 | 2.18 | 1.86 | 2.04 | 1.69 | 2.25 | 1.77 | 1.79 | 1.96 |
| P/B Ratio | 1.90 | 2.72 | 2.21 | 1.89 | 1.49 | 1.68 | 1.52 | 2.05 | 1.99 | 1.87 | 1.37 |
| P/FCF | 14.18 | 21.92 | 22.09 | 27.51 | 42.51 | 27.19 | 37.24 | 35.49 | 121.07 | 49.33 | — |
| P/OCF | 11.38 | 17.59 | 16.79 | 23.16 | 19.56 | 17.83 | 17.76 | 20.12 | 26.81 | 19.85 | 41.59 |
P/E links to full P/E history page with 30-year chart
PSO EV Ratios
Enterprise-value multiples — capital-structure-neutral measures of total business value
Pearson plc's enterprise value stands at 7.6x EBITDA, 23% below its 5-year average of 9.8x. The Communication Services sector median is 9.6x, placing the stock at a 21% discount on an enterprise-value basis.
| Metric | TTM | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 | FY 2015 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| EV / Revenue | — | 3.37 | 2.63 | 2.35 | 2.00 | 2.20 | 2.02 | 2.29 | 1.90 | 2.01 | 2.10 |
| EV / EBITDA | 7.56 | 11.20 | 9.28 | 11.00 | 9.76 | 7.52 | 8.96 | 8.26 | 7.77 | — | 11.81 |
| EV / EBIT | 14.90 | 20.30 | 17.60 | 23.87 | 29.35 | 32.28 | 31.82 | 19.05 | 19.36 | — | — |
| EV / FCF | — | 23.77 | 24.22 | 29.75 | 45.60 | 29.37 | 44.30 | 36.07 | 129.66 | 55.45 | — |
PSO Profitability
Margins and return-on-capital ratios measuring operating efficiency
Pearson plc earns an operating margin of 15.2%, above the Communication Services sector average of 1.6%. Operating margins have expanded from 7.1% to 15.2% over the past 3 years, signaling improving operational efficiency. ROE of 10.8% is modest. ROIC of 8.3% represents adequate returns on invested capital.
Margins
Full margin charts and quarterly trend are on the Earnings History page
| Metric | TTM | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 | FY 2015 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Gross Margin | 51.0% | 51.0% | 49.9% | 46.7% | 49.0% | 48.0% | 52.0% | 52.9% | 54.2% | 54.0% | 55.7% |
| Operating Margin | 15.2% | 15.2% | 13.6% | 7.1% | 5.3% | 12.1% | 7.1% | 13.4% | 10.0% | -54.9% | -9.0% |
| Net Profit Margin | 12.2% | 12.2% | 10.3% | 6.3% | 5.2% | 9.7% | 6.8% | 14.2% | 9.0% | -51.3% | 18.4% |
Return on Capital
| Metric | TTM | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 | FY 2015 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| ROE | 10.8% | 10.8% | 9.0% | 5.6% | 4.2% | 7.8% | 6.0% | 13.8% | 9.7% | -43.4% | 13.3% |
| ROA | 6.4% | 6.4% | 5.4% | 3.3% | 2.4% | 4.4% | 3.4% | 7.4% | 4.5% | -21.5% | 7.1% |
| ROIC | 8.3% | 8.3% | 7.5% | 4.1% | 2.9% | 6.0% | 4.0% | 9.0% | 6.8% | -30.2% | -4.1% |
| ROCE | 10.1% | 10.1% | 8.9% | 4.7% | 3.2% | 6.9% | 4.6% | 9.7% | 6.5% | -27.9% | -4.3% |
PSO Leverage & Debt
Solvency and debt-coverage ratios — lower is generally safer
Pearson plc carries a Debt/EBITDA ratio of 1.4x, which is manageable (62% below the sector average of 3.6x). Net debt stands at $929M ($1.5B total debt minus $543M cash). Interest coverage of 6.8x is adequate, though a cyclical earnings downturn could tighten the margin of safety.
| Metric | TTM | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 | FY 2015 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt / Equity | 0.36 | 0.36 | 0.29 | 0.28 | 0.33 | 0.40 | 0.39 | 0.16 | 0.27 | 0.57 | 0.36 |
| Debt / EBITDA | 1.38 | 1.38 | 1.12 | 1.51 | 2.00 | 1.66 | 1.93 | 0.63 | 0.98 | — | 2.93 |
| Net Debt / Equity | — | 0.23 | 0.21 | 0.15 | 0.11 | 0.13 | 0.29 | 0.03 | 0.14 | 0.23 | 0.10 |
| Net Debt / EBITDA | 0.87 | 0.87 | 0.82 | 0.83 | 0.66 | 0.56 | 1.43 | 0.13 | 0.51 | — | 0.79 |
| Debt / FCF | — | 1.85 | 2.13 | 2.25 | 3.09 | 2.17 | 7.06 | 0.58 | 8.59 | 6.12 | — |
| Interest Coverage | 6.85 | 6.85 | 8.16 | 3.93 | 2.69 | 5.20 | 3.27 | 6.08 | 5.71 | -42.32 | -8.78 |
PSO Liquidity & Efficiency
Short-term solvency ratios and asset-utilisation metrics
A current ratio of 1.85x means Pearson plc can comfortably meet its short-term obligations, though there is limited excess liquidity. The current ratio has declined from 1.91x to 1.85x over the past 3 years.
| Metric | TTM | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 | FY 2015 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Current Ratio | 1.85 | 1.85 | 1.73 | 1.91 | 2.04 | 2.03 | 2.13 | 1.58 | 1.49 | 2.12 | 2.15 |
| Quick Ratio | 1.80 | 1.80 | 1.67 | 1.83 | 1.98 | 1.95 | 2.01 | 1.51 | 1.42 | 2.00 | 2.04 |
| Cash Ratio | 0.37 | 0.37 | 0.22 | 0.38 | 0.59 | 0.67 | 0.29 | 0.27 | 0.24 | 0.76 | 0.91 |
| Asset Turnover | — | 0.52 | 0.55 | 0.53 | 0.47 | 0.46 | 0.51 | 0.52 | 0.57 | 0.45 | 0.38 |
| Inventory Turnover | 23.53 | 23.53 | 20.21 | 19.49 | 17.83 | 13.70 | 10.99 | 11.85 | 13.96 | 8.91 | 9.39 |
| Days Sales Outstanding | — | 103.89 | 82.56 | 81.34 | 93.91 | 88.64 | 106.89 | 94.59 | 59.85 | 97.10 | 93.62 |
PSO Shareholder Yields
Earnings, FCF, buyback, and dividend yields — total returns to shareholders
Pearson plc returns 7.0% to shareholders annually — split between a 2.0% dividend yield and 5.0% buyback yield. The payout ratio of 35.9% is conservative, leaving significant room for dividend growth or reinvestment. The earnings yield of 5.6% (inverse of P/E) provides a useful comparison to bond yields when assessing the stock's relative attractiveness to fixed income.
Dividends
Full dividend history and growth charts are on the Dividend History page
| Metric | TTM | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 | FY 2015 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Dividend Yield | 2.0% | 1.4% | 1.7% | 1.9% | 2.3% | 2.1% | 2.2% | 1.5% | 4.0% | 5.2% | 4.8% |
| Payout Ratio | 35.9% | 35.9% | 40.7% | 64.5% | 84.2% | 44.2% | 55.7% | 23.1% | 78.3% | — | 51.4% |
Total Shareholder Return Metrics
| Metric | TTM | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 | FY 2015 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings Yield | 5.6% | 3.9% | 4.3% | 2.9% | 2.7% | 4.5% | 4.0% | 6.4% | 5.1% | — | 9.4% |
| FCF Yield | 7.1% | 4.6% | 4.5% | 3.6% | 2.4% | 3.7% | 2.7% | 2.8% | 0.8% | 2.0% | — |
| Buyback Yield | 5.0% | 3.2% | 2.5% | 4.7% | 0.3% | 2.6% | 0.8% | 1.6% | 1.9% | 0.3% | 0.3% |
| Total Shareholder Yield | 7.0% | 4.7% | 4.3% | 6.5% | 2.6% | 4.7% | 3.0% | 3.1% | 5.8% | 5.5% | 5.1% |
| Shares Outstanding | — | $684M | $717M | $742M | $759M | $755M | $778M | $779M | $814M | $815M | $814M |
Peer Comparison
Compare PSO with 10 similar companies in its peer group
| Company | Market Cap | P/E | EV/EBITDA | P/FCF | Gross Margin | Op Margin | ROE | ROIC | Debt/EBITDA |
|---|---|---|---|---|---|---|---|---|---|
 PSOYou | $9B | 17.9 | 7.6 | 14.2 | 51.0% | 15.2% | 10.8% | 8.3% | 1.4 |
 SCHL | $1B | -622.5 | 9.8 | 14.4 | 51.7% | 1.3% | -0.2% | 1.4% | 2.8 |
 STRA | $2B | 13.9 | 6.9 | 11.1 | 49.0% | 15.5% | 7.7% | 9.0% | 0.4 |
 PRDO | $2B | 13.2 | 8.3 | 9.3 | 71.7% | 23.2% | 16.6% | 15.3% | 0.4 |
 LOPE | $4B | 18.4 | 11.4 | 16.1 | 52.4% | 27.5% | 28.2% | 32.5% | 0.6 |
 CHGG | $118M | -1.1 | 11.1 | — | 60.2% | -16.8% | -66.2% | -13.4% | 5.5 |
 COUR | $906M | -17.3 | — | 8.4 | 54.6% | -10.3% | -8.3% | — | — |
 UDMY | $677M | 180.2 | 20.0 | 8.4 | 65.6% | -0.3% | 1.9% | -56.7% | 0.4 |
 LAUR | $5B | 19.3 | 10.9 | 19.8 | 28.3% | 25.3% | 26.2% | 20.3% | 1.6 |
 UTI | $2B | 35.7 | 16.9 | 40.1 | 49.7% | 10.0% | 21.4% | 14.3% | 2.0 |
 GOOG | $4.4T | 34.0 | 29.8 | 60.7 | 59.7% | 32.1% | 35.7% | 25.1% | 0.4 |
| Communication Services Median | — | 15.3 | 9.6 | 11.4 | 48.5% | 1.6% | 2.0% | 2.6% | 3.6 |
Peer selection based on competitive and market overlap. Compare multiple stocks →
Download Financial Ratios Data
Includes 30+ ratios · 30 years · Updated daily
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PSO — Frequently Asked Questions
Quick answers to the most common questions about buying PSO stock.
What is Pearson plc's P/E ratio?
Pearson plc's current P/E ratio is 17.9x. The historical average is 31.6x. This places it at the 20th percentile of its historical range.
What is Pearson plc's EV/EBITDA?
Pearson plc's current EV/EBITDA is 7.6x. This enterprise value multiple compares the company's total value (equity + debt - cash) to its EBITDA. The historical average is 19.5x.
What is Pearson plc's ROE?
Pearson plc's return on equity (ROE) is 10.8%. The historical average is 11.1%.
Is PSO stock overvalued?
Based on historical data, Pearson plc is trading at a P/E of 17.9x. This is at the 20th percentile of its historical P/E range. Compare with industry peers and growth rates for a complete picture.
What is Pearson plc's dividend yield?
Pearson plc's current dividend yield is 2.02% with a payout ratio of 35.9%.
What are Pearson plc's profit margins?
Pearson plc has 51.0% gross margin and 15.2% operating margin. Operating margin between 10-20% is typical for established companies.
How much debt does Pearson plc have?
Pearson plc's Debt/EBITDA ratio is 1.4x, indicating moderate leverage. A ratio below 2x is generally considered financially healthy.