SCHL
Scholastic Corporation
$46.53
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 98.1% above fair value
You pay
$46.53
Bear
$18.79
Fair
$23.49
Bull
$28.19
Bear
$18.79
-59.6%
$1.57 × 12x P/E
Fair
$23.49
-49.5%
$1.57 × 15x P/E
Bull
$28.19
-39.4%
$1.57 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
29.7x
Summary
Applying a 15x P/E to adjusted EPS of $1.57, the base-case value is $23.49 per share. DDM cross-check: $40.79.
Warnings
Dividend-based valuation: $40.79 (above our primary estimate by 74%). Large gaps may signal the dividend doesn't reflect full earning power.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples