Latest Ratios: P/E Ratio 25.3x · EV/EBITDA 7.9x · ROE 8.5%. (1996–2025 historical series)
Price-based multiples — how expensive the stock is relative to earnings, sales, book value, and cash flow
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Market Cap | $11.0B | $9.3B | $11.0B | $8.8B | $8.4B | $6.4B | $6.9B | $6.6B | $9.3B | $8.0B | $8.1B |
| Enterprise Value | $12.5B | $10.4B | $12.0B | $9.7B | $9.0B | $6.8B | $7.5B | $7.8B | $9.4B | $8.6B | $9.1B |
| P/E Ratio → | 25.31 | 28.08 | 25.59 | 23.19 | 34.15 | 36.52 | 22.39 | 24.79 | 15.71 | 19.64 | — |
| P/S Ratio | 2.30 | 2.59 | 3.10 | 2.40 | 2.18 | 1.86 | 2.04 | 1.69 | 2.25 | 1.77 | 1.79 |
| P/B Ratio | 2.28 | 2.54 | 2.72 | 2.21 | 1.89 | 1.49 | 1.68 | 1.52 | 2.05 | 1.99 | 1.87 |
| P/FCF | 12.73 | 14.34 | 21.92 | 22.09 | 27.51 | 42.51 | 27.19 | 37.24 | 35.49 | 121.07 | 49.33 |
| P/OCF | 12.20 | 13.74 | 17.59 | 16.79 | 23.16 | 19.56 | 17.83 | 17.76 | 20.12 | 26.81 | 19.85 |
P/E links to full P/E history page with 30-year chart
Enterprise-value multiples — capital-structure-neutral measures of total business value
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| EV / Revenue | — | 2.91 | 3.37 | 2.63 | 2.35 | 2.00 | 2.20 | 2.02 | 2.29 | 1.90 | 2.01 |
| EV / EBITDA | 7.89 | 8.76 | 11.20 | 9.28 | 11.00 | 9.76 | 7.52 | 8.96 | 8.26 | 7.77 | — |
| EV / EBIT | 15.18 | 19.58 | 20.30 | 17.60 | 23.87 | 29.35 | 32.28 | 31.82 | 19.05 | 19.36 | — |
| EV / FCF | — | 16.12 | 23.77 | 24.22 | 29.75 | 45.60 | 29.37 | 44.30 | 36.07 | 129.66 | 55.45 |
Margins and return-on-capital ratios measuring operating efficiency
Full margin charts and quarterly trend are on the Earnings History page
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Gross Margin | 52.0% | 52.0% | 51.0% | 49.9% | 46.7% | 49.0% | 48.0% | 52.0% | 52.9% | 54.2% | 54.0% |
| Operating Margin | 17.3% | 17.3% | 15.2% | 13.6% | 7.1% | 5.3% | 12.1% | 7.1% | 13.4% | 10.0% | -54.9% |
| Net Profit Margin | 9.2% | 9.2% | 12.2% | 10.3% | 6.3% | 5.2% | 9.7% | 6.8% | 14.2% | 9.0% | -51.3% |
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| ROE | 8.5% | 8.5% | 10.8% | 9.0% | 5.6% | 4.2% | 7.8% | 6.0% | 13.8% | 9.7% | -43.4% |
| ROA | 4.9% | 4.9% | 6.4% | 5.4% | 3.3% | 2.4% | 4.4% | 3.4% | 7.4% | 4.5% | -21.5% |
| ROIC | 9.5% | 9.5% | 8.3% | 7.5% | 4.1% | 2.9% | 6.0% | 4.0% | 9.0% | 6.8% | -30.2% |
| ROCE | 11.6% | 11.6% | 10.1% | 8.9% | 4.7% | 3.2% | 6.9% | 4.6% | 9.7% | 6.5% | -27.9% |
Solvency and debt-coverage ratios — lower is generally safer
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt / Equity | 0.41 | 0.41 | 0.36 | 0.29 | 0.28 | 0.33 | 0.40 | 0.39 | 0.16 | 0.27 | 0.57 |
| Debt / EBITDA | 1.25 | 1.25 | 1.38 | 1.12 | 1.51 | 2.00 | 1.66 | 1.93 | 0.63 | 0.98 | — |
| Net Debt / Equity | — | 0.31 | 0.23 | 0.21 | 0.15 | 0.11 | 0.13 | 0.29 | 0.03 | 0.14 | 0.23 |
| Net Debt / EBITDA | 0.97 | 0.97 | 0.87 | 0.82 | 0.83 | 0.66 | 0.56 | 1.43 | 0.13 | 0.51 | — |
| Debt / FCF | — | 1.78 | 1.85 | 2.13 | 2.25 | 3.09 | 2.17 | 7.06 | 0.58 | 8.59 | 6.12 |
| Interest Coverage | 7.66 | 7.66 | 7.46 | 9.00 | 5.49 | 3.43 | 2.94 | 2.92 | 5.45 | 5.59 | -43.73 |
Short-term solvency ratios and asset-utilisation metrics
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Current Ratio | 2.00 | 2.00 | 1.85 | 1.73 | 1.91 | 2.04 | 2.03 | 2.13 | 1.58 | 1.49 | 2.12 |
| Quick Ratio | 1.94 | 1.94 | 1.80 | 1.67 | 1.83 | 1.98 | 1.95 | 2.01 | 1.51 | 1.42 | 2.00 |
| Cash Ratio | 0.29 | 0.29 | 0.37 | 0.22 | 0.38 | 0.59 | 0.67 | 0.29 | 0.27 | 0.24 | 0.76 |
| Asset Turnover | — | 0.55 | 0.52 | 0.55 | 0.53 | 0.47 | 0.46 | 0.51 | 0.52 | 0.57 | 0.45 |
| Inventory Turnover | 26.06 | 26.06 | 23.53 | 20.21 | 19.49 | 17.83 | 13.70 | 10.99 | 11.85 | 13.96 | 8.91 |
| Days Sales Outstanding | — | 111.74 | 103.89 | 82.56 | 81.34 | 93.91 | 88.64 | 106.89 | 94.59 | 59.85 | 97.10 |
Earnings, FCF, buyback, and dividend yields — total returns to shareholders
Full dividend history and growth charts are on the Dividend History page
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Dividend Yield | 1.9% | 1.7% | 1.4% | 1.7% | 1.9% | 2.3% | 2.1% | 2.2% | 1.5% | 4.0% | 5.2% |
| Payout Ratio | 47.8% | 47.8% | 35.9% | 40.7% | 64.5% | 84.2% | 44.2% | 55.7% | 23.1% | 78.3% | — |
| Metric | TTM | FY 2025 | FY 2024 | FY 2023 | FY 2022 | FY 2021 | FY 2020 | FY 2019 | FY 2018 | FY 2017 | FY 2016 |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings Yield | 4.0% | 3.6% | 3.9% | 4.3% | 2.9% | 2.7% | 4.5% | 4.0% | 6.4% | 5.1% | — |
| FCF Yield | 7.9% | 7.0% | 4.6% | 4.5% | 3.6% | 2.4% | 3.7% | 2.7% | 2.8% | 0.8% | 2.0% |
| Buyback Yield | 5.0% | 4.5% | 3.2% | 2.5% | 4.7% | 0.3% | 2.6% | 0.8% | 1.6% | 1.9% | 0.3% |
| Total Shareholder Yield | 6.9% | 6.2% | 4.7% | 4.3% | 6.5% | 2.6% | 4.7% | 3.0% | 3.1% | 5.8% | 5.5% |
| Shares Outstanding | — | $660M | $684M | $717M | $742M | $759M | $755M | $778M | $779M | $814M | $815M |
Regulatory and enrollment volatility
Based on current market data, Pearson trades at a forward P/E of 21.94, which appears to reflect a conglomerate discount as investors struggle to reconcile the high-growth potential of Workforce Skills with the mature, declining legacy print business segments identified in recent institutional research filings.
The valuation multiples suggest the market is pricing Pearson as a legacy publisher rather than a digital-first assessment provider, potentially ignoring the durability of the Pearson VUE moat. Investors should monitor whether the current PEG ratio of 5.82 indicates an overvaluation relative to growth or if the market is simply failing to account for the margin-accretive shift toward subscription-based digital services.
As reported in financial statements, Pearson's ROIC has hovered between 1.6% and 4.8% over the last ten quarters, suggesting that the company is currently struggling to generate returns on invested capital that meaningfully exceed its cost of capital despite ongoing restructuring and digital transformation efforts.
The persistent gap between ROIC and historical peer benchmarks warrants further investigation into whether the company's capital allocation strategy is truly value-additive. The modest return profile appears to be a function of both the high fixed-cost base of the 'One Pearson' architecture and the historical tendency to overpay for acquisitions in the OPM space.
According to the provided quarterly data, Pearson's cash conversion cycle has shifted from a positive 62 days in 2021Q2 to a negative 43 days by 2025Q4, indicating a significant improvement in the company's ability to leverage customer payments to fund its operational requirements.
This negative CCC trend suggests that Pearson is effectively utilizing its 'gatekeeper' status in professional testing to collect fees well in advance of service delivery. While this provides a structural liquidity advantage, investors should monitor whether this efficiency is sustainable or if it is merely a byproduct of timing shifts in large-scale government and institutional contract renewals.
Based on the latest quarterly filings, Pearson maintains a debt-to-equity ratio of 0.41, which, when compared to the broader industrial sector, suggests a fortress-like balance sheet that provides the company with significant headroom to navigate potential regulatory shocks or sector-specific demand downturns in Higher Education.
The low leverage profile appears to be a deliberate strategic choice, allowing management to prioritize capital returns through buybacks and dividends even during periods of revenue volatility. This financial flexibility is a critical differentiator, as it insulates the company from the interest rate sensitivity that currently plagues more leveraged peers in the education and publishing space.
The P/E ratio is frequently misapplied to Pearson, as it fails to account for the significant non-recurring restructuring charges and portfolio disposals that have historically distorted the company's reported earnings, thereby masking the underlying cash-generative capacity of the continuing Assessment & Qualifications business segment.
Analysts should instead focus on FCF yield and organic revenue growth, as these metrics better capture the performance of the core business without the noise of divestment-related accounting. Relying on headline P/E ratios may lead to an inaccurate assessment of the company's valuation, as it ignores the structural shift toward recurring, high-margin digital assessment revenue.
Includes 30+ ratios · 30 years · Updated daily
DCF models, multiple analysis, and analyst estimates.
10-year return with dividends reinvested.
See how regular investing compounds over time.
Compare growth, multiples, and margins vs sector.
Quick answers to the most common questions about buying PSO stock.
Pearson plc's current P/E ratio is 25.3x. The historical average is 31.5x. This places it at the 35th percentile of its historical range.
Pearson plc's current EV/EBITDA is 7.9x. This enterprise value multiple compares the company's total value (equity + debt - cash) to its EBITDA. The historical average is 19.1x.
Pearson plc's return on equity (ROE) is 8.5%. The historical average is 10.5%.
Based on historical data, Pearson plc is trading at a P/E of 25.3x. This is at the 35th percentile of its historical P/E range. Compare with industry peers and growth rates for a complete picture.
Pearson plc's current dividend yield is 1.87% with a payout ratio of 47.8%.
Pearson plc has 52.0% gross margin and 17.3% operating margin. Operating margin between 10-20% is typical for established companies.
Pearson plc's Debt/EBITDA ratio is 1.2x, indicating moderate leverage. A ratio below 2x is generally considered financially healthy.