MODEL VERDICT
Pearson plc (PSO)
Relative Valuation•Peer multiples, Monte Carlo simulation & quality-adjusted fair value
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Composite score derived from valuation, quality, and risk factors
Quantitative model thresholds · For educational and research purposes only
Each row records the model's monthly assessment. High Conviction = the model detected notable undervaluation vs peers. Neutral = no notable divergence was found. The return column shows the actual price change over 90 days for reference. This is a quantitative observation log — not investment advice.
| Date | Assessment | Score | Price | Status | 90d Fwd Return |
|---|---|---|---|---|---|
| May 1, 2026 | NEUTRAL | 0.26 | $15.08 | CURRENT | — |
| Apr 24, 2026 | NEUTRAL | 0.26 | $14.47 | CURRENT | — |
| Apr 17, 2026 | NEUTRAL | 0.44 | $14.66 | CURRENT | — |
| Apr 16, 2026 | NEUTRAL | 0.46 | $14.20 | CURRENT | — |
| Apr 10, 2026 | MODERATE | 0.69 | $13.38 | CURRENT | — |
Historical model observations for research purposes only. Past quantitative patterns do not predict future results. Not a recommendation to buy, sell, or hold any security.
| Methodology | Fair Value | vs Current | Weight | Quality | Status |
|---|---|---|---|---|---|
| Forward P/E 8 analyst estimates | $10.32 | -31.6% | 20% | A- | Analyst Est. |
| EV/EBITDA 7 industry peers | $24.67 | +63.6% | 20% | A- | Peer Data |
| Industry Median P/E 6 industry peers | $11.57 | -23.3% | 15% | A | Peer Data |
| Price / Free Cash Flow 8 industry peers | $9.11 | -39.6% | 15% | B+ | Peer Data |
| EV/EBIT 6 industry peers | $9.32 | -38.2% | 8% | B+ | Peer Data |
| EV/FCF 8 industry peers | $9.22 | -38.9% | 7% | B | Model Driven |
| Peg Ratio 4 industry peers | $14.86 | -1.5% | 5% | B | Data |
| EV To Revenue 8 industry peers | $15.51 | +2.9% | 4% | B | Data |
| Price / Sales 8 industry peers | $18.65 | +23.7% | 3% | B | Model Driven |
| Earnings Yield 6 industry peers | $11.55 | -23.4% | 2% | B | Data |
| FCF Yield 8 industry peers | $9.11 | -39.6% | 1% | B | Data |
| Weighted Output Blended model output | $15.04 | -0.3% | 100% | 85 | FAIRLY VALUED |
| EPS Growth ↓ | P/E Multiple → | 14× | 16× | 18× (Current) | 20× | 22× |
|---|---|---|---|---|---|
| Bear Case (5%) | $9 | $11 | $12 | $13 | $15 |
| Conservative (9%) | $10 | $11 | $12 | $14 | $15 |
| Base Case (13.1%) | $10 | $11 | $13 | $14 | $16 |
| Bull Case (18%) | $10 | $12 | $13 | $15 | $16 |
Cross-sectional regression predicting expected multiples based on growth, margins, ROIC, and beta.
| Multiple | Avg | Median | Min | Max | Std |
|---|---|---|---|---|---|
| P/E Ratio | 26.05 | 24.79 | 15.71 | 36.52 | 7.14 |
| EV/EBIT | 24.90 | 23.87 | 17.60 | 32.28 | 6.22 |
| EV/EBITDA | 9.43 | 9.28 | 7.52 | 11.20 | 1.35 |
| P/FCF | 30.56 | 27.51 | 21.92 | 42.51 | 7.94 |
| P/FFO | 9.12 | 9.17 | 7.58 | 11.49 | 1.52 |
| P/TBV | 6.75 | 6.13 | 4.22 | 10.74 | 2.58 |
| P/AFFO | 10.52 | 9.89 | 8.88 | 12.29 | 1.31 |
| P/B Ratio | 1.94 | 1.89 | 1.49 | 2.72 | 0.44 |
| Div Yield | 0.02 | 0.02 | 0.01 | 0.02 | 0.00 |
| P/S Ratio | 2.22 | 2.18 | 1.69 | 3.10 | 0.46 |
Based on our peer multiples analysis with 28 valuation metrics, the model estimates PSO's fair value at $15.04 vs the current price of $15.08, implying -0.3% downside potential. Model verdict: Fairly Valued. Confidence: 85/100. This is a quantitative estimate, not a recommendation.
The blended fair value of $15.04 is calculated using four lenses: industry median multiples (40%), historical multiples (30%), forward estimates (20%), and quality-adjusted multiples (10%). Monte Carlo simulation (10,000 iterations) gives a range of $13.76 (P10) to $17.10 (P90), with a median of $15.40.
PSO's current P/E of 17.6x compares to the industry median of 18.4x (6 peers in the group). This represents a -4.2% discount to the industry. The historical average P/E is 26.0x over 7 years. Signal: Fair Value.
15 analysts cover PSO with a consensus rating of Hold. The consensus price target is $14.50 (range: $11.00 — $18.00), implying -3.8% upside from the current price. Grade breakdown: Strong Buy (0), Buy (3), Hold (12), Sell (0), Strong Sell (0).
The model confidence score is 85/100, based on: data completeness (30), peer quality (25), historical depth (20), earnings stability (8), and model agreement (2). Cyclicality penalty: -0 points. The model shows strong agreement across inputs.
The model flags several key risks: (1) Macro/regulatory risks are not captured in this model but remain material.
Peak earnings risk refers to the possibility that PSO's current profitability is above its sustainable long-term trend. The model detects a margin Z-score of +0.6σ, meaning margins are 0.6 standard deviations above their historical average. If margins revert to the 7-year mean (9.2%), the model estimates fair value drops by 1070.0% to approximately $13. This isn't a prediction — it's a scenario analysis.
No. This dashboard is a quantitative research tool for educational and informational purposes only. It is not investment advice, a solicitation, or a recommendation to buy, sell, or hold any security. The operator of this platform is not a registered investment advisor (RIA), broker-dealer, or financial planner. All model outputs, fair value estimates, signals, and scenarios are the result of automated quantitative computations and should not be construed as professional financial guidance. You should consult a qualified, licensed financial advisor before making any investment decisions. Past model performance is not indicative of future results.