Pearson PLC (PSON) fair value: what the stock is really worth
As of Nov 6, 2026: fair value (intrinsic value) of Pearson PLC stock £10.95, price £12.95, that is 15.4% below the price, quality 74 out of 100. Rating: overvalued. Calculated from audited financials with 24 of our 26 valuation models and 37 quality factors, updated daily.
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Our calculation puts a fair price 15% below what the stock costs today.
Quality 74/100
Low debt
Generates free cash flow
2.0% dividend yield · Well covered
Upbeat coverage
Broad data
Thin margins · 8.8% net margin (TTM)
Mixed vs. peers(6/15)
Moderate moat48/100 · thin data
Fair value £10.95 · Overvalued (−15.4%)
Weak Growth(revenue 5y +1.0 %/yr in GBP)
Risks from the AI analysis
🚩Generative AI could commoditise digital courseware🚩Regulatory breaches could hit assessment accreditation🚩Edtech rivals like Coursera could take online share
69 individual criteria per stock, every one traceableSee the method →
Price vs Fair Value
White line = price, green steps = our fair value per fiscal year. As of Nov 1, 2026.
How to read this chart
60‑month range £5.71 – £13.78 · fair‑value band £7.56 – £14.33 · the £12.95 price screens above the £10.95 fair value. Green steps = our fair value per fiscal year (point-in-time, no hindsight). 1 fiscal year is left out: there the valuation rested on only a fraction of the usual models. As of Nov 1, 2026.
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Pearson plc provides educational courseware, assessments, and services in the United Kingdom, the United States, Canada, the Asia Pacific, other European countries, and internationally.
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It operates through five segments: Assessment & Qualifications, Virtual Learning, English Language Learning, Enterprise Learning & Skills, and Higher Education.
The Assessment & Qualifications segment offers pearson professional assessments, US student assessment, clinical assessment, UK GCSE, and A levels and international academic qualifications and associated courseware, including the English-speaking Canadian and Australian K-12 businesses, and PDR. The Virtual Learning segment provides virtual schools and online program management.
The English Language Learning segment offers Pearson test of English, institutional courseware, and English online solutions. The Enterprise Learning & Skills segment provides vocational qualifications, GED, TalentLens, Faethm, Credly, Pearson College, and Enterprise content and training.
The Higher Education segment engages in the US, Canadian, and international higher education courseware businesses. Pearson plc was founded in 1844 and is headquartered in London, the United Kingdom.
Stock analysis
Pearson PLC (PSON) currently trades at £12.95, while our model-based Fair Value estimate is £10.95, 15% below the price, so the stock looks overvalued today.
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Valuation
Bull case: the DCF Models group reads highest at a median of £11.63 per share, and 6 of the 24 models we run sit above the £12.95 price.
Bear case: the Dividend Discount group reads lowest at £2.61, and 18 of the 24 models stay below the price. Data coverage for this calculation is high.
Scenario range: £7.56 (bear) to £14.33 (bull), the price of £12.95 sits inside it. Bear and bull are the same models on cautious and optimistic assumptions, a range, not a price target.
Quality & growth
The Quality Score stands at 74/100 (solid quality), in the Communication Services sector.
Weak Growth: Growth has flattened: the last year, three and five years all grew more slowly than the long-term average.
Pearson PLC reported revenue of £3.6B in FY2025 versus £3.4B in FY2021, a compound +1.1%/yr. Reported net income was £335M in FY2025, compounding +17.3%/yr from FY2021.
Key figures
Market cap £8.1B Large · P/E ratio 25.9 · P/S ratio 2.22 · EPS (TTM) £0.5000 · Dividend yield 2.0% · Net margin 8.8% · Return on equity 9.2% · Return on assets (EBIT) 5.9%.
Competitive moat
Our AI-assisted moat analysis scores the competitive advantage at 48 out of 100 (low confidence).
What moves the price
The share trades about 6% below its 52-week high and 45% above its 52-week low, currently above its 200-day average.
For context, the median of 10 Communication Services peers we cover trades at −7% fair-value upside, at −15%, PSON screens richer than that median.
Fair Value models
Bear£7.56Fair Value £10.95Bull£14.33
Price £12.95 · Downside -15.4%
Model ⓘEach model values the company its own way (discounted cash flow, earnings, assets, dividends). The fair value above starts from their evidence-weighted blend, not from a single model. In cyclical trough or peak years, after dilution or a stock split it is adjusted afterwards, so it can sit above or below the models. Based on fiscal year 2025 figures (about 10 months old). Earnings retained since then (£0.2072 per share) are deliberately not added.Bear ⓘBear = the cautious scenario: the same model computed with conservative anchors (lower growth, margins and valuation multiples). Together with Bull it frames a plausible valuation range, not a price target.BaseBull ⓘBull = the optimistic scenario: the same model computed with favourable anchors (higher growth, margins and valuation multiples). Together with Bear it frames a plausible valuation range, not a price target. If a model's bull case is above four times its base value, the table shows that limit with a > sign (like the overall Bull above): beyond it no assumption holds.Coverage ⓘCoverage = how well-backed THIS model's estimate is for this stock (0–100): how complete and reliable its input data are, and how well the model fits the company. The final Fair Value is an evidence-weighted blend, so better-evidenced models count more. Green ≥70, amber 50–69, grey below 50.
Growth Quality ⓘGrowth is valuable only when reinvestment earns attractive returns (Aswath Damodaran): sustainable growth depends on return on capital, reinvestment and efficiency. Basis: total company revenue over the periods shown on the cards (3Y/5Y/all years), not per share, so a merger can show up as a growth jump; per-share earnings growth is in the value-creation card.40/100
Growth has flattened: the last year, three and five years all grew more slowly than the long-term average.
Revenue growth 1 year
+0.7%
Revenue growth 3 years ⓘMeasures the company's TOTAL revenue from reported annual statements: compound average growth per year (CAGR) from the fiscal year 3, 5 or N years back to the most recent comparable fiscal year. Not per share: buybacks do not change this number, and a merger can appear as a growth jump. Per-share growth (which does include buybacks) is in the value-creation card.
−2.3%
Revenue growth 5 years ⓘMeasures the company's TOTAL revenue from reported annual statements: compound average growth per year (CAGR) from the fiscal year 3, 5 or N years back to the most recent comparable fiscal year. Not per share: buybacks do not change this number, and a merger can appear as a growth jump. Per-share growth (which does include buybacks) is in the value-creation card.
+1.0%
Start year 2020 (pandemic). Over 10 years: −2.2% a year
Revenue growth 40 years ⓘMeasures the company's TOTAL revenue from reported annual statements: compound average growth per year (CAGR) from the fiscal year 3, 5 or N years back to the most recent comparable fiscal year. Not per share: buybacks do not change this number, and a merger can appear as a growth jump. Per-share growth (which does include buybacks) is in the value-creation card.
+3.3%
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What shareholders gained per year (last 5 years) ⓘWhat the business itself delivers per year: earnings growth per share plus the dividend yield. This is what you get IF the market keeps valuing the stock the same way: it contains no assumption about the market changing its mind. Computed per share, so buybacks count and a merger does not pass as growth. For a company that pays no dividend it is pure earnings growth per share. Period: earnings growth per share as CAGR over the last 5 reported fiscal years (annual statements), plus the current dividend yield. The start value is the median of the three years around the start, so a single crisis year (a pandemic or a write-down) does not distort the rate.
+10.4%
Earnings growth per share plus dividend.
Earnings per share, growth per year+8.4%
Dividend (yield on the price)2.0%
Pace: 5 vs 10 years ⓘTwo data points, not a trend model: earnings growth per share over the last 5 fiscal years against the last 10. Labelled "steady" when both rates are within 3 percentage points of each other, otherwise picking up or flattening. Shown only when ten years of history exist.8.4% vs −4.4%, picking up
Profit margin 2020 to 2025 ⓘOperating margin then vs now, from reported annual statements. A falling margin after a boom year is the classic peak-earnings signal: the growth rate then leans on an inflated base.8% → 14%
Pace: the 5-year rate starts in 2020 (pandemic)
⚠ Revenue per share shrinking 1.4%/yr over ~10Y (margins intact) ⓘStructural-decline marker: revenue PER SHARE has fallen over the last decade (robust median trend, not a single year). Backtested across 2005 to 2017, such businesses trailed the market by about 2.5 percentage points per year. Display only: it does not change the fair value or the quality score.
Growth Forecast
Price in line with expectations
The price assumes about as much growth as the company has delivered so far and about what analysts expect.
What the price assumes ⓘThis turns our valuation around: instead of asking what the share is worth, it asks what growth the current price requires. It uses the cash the company keeps after all spending (free cash flow), the same discount rate as our models, five years of growth, then slowing evenly to 2 % a year by year ten. Compared with the analysts' sales forecasts extended to the same five years (at least three analysts, for context only, it does not enter the Fair Value): within 3 percentage points counts as "in line" (amber), below that little optimism (green), above that a lot of optimism (red).
+2.1%
Yearly growth needed for the next five years to justify today's price.
What forecasts expect ⓘAnalysts publish sales forecasts for the next two fiscal years. For the years after that, growth slows evenly to 2 % a year by year ten (2 % is the long-run rate our models use). Projected years are marked as such.
+4.2%
Yearly sales growth analysts expect, extended to five years.
After inflation (UK: IMF forecast 2.3% a year to 2030, 3.3% from 2016 to 2025) that is about −0.2% a year for the price and +1.8% for the forecasts.
News mood ⓘNews mood, the average tone of recent news (98 articles), rated against how stocks are usually covered. 🚀 Hype = unusually upbeat · 🙂 Positive = above average · 😐 Neutral = typical · 🙁 Negative = below average · 😨 Very negative = unusually downbeat. It reflects the tone of coverage, not our valuation.Hype
Recent news coverage is unusually upbeat, far more positive than stocks are typically covered.
AI conclusion: Pearson draws strength from steady gains in virtual learning and qualifications plus new AI tools for assessment and training, yet its main weakness remains thin evidence of any durable moat across public data.
Main risk: Generative AI tools might replace or reduce demand for Pearson's digital courseware and learning content, squeezing prices or margins in higher education segments.
Bull case: Pearson could integrate its proprietary AI tools with established assessment expertise to create differentiated, accredited learning solutions that institutions and employers continue to value.
Bear case: If generative AI commoditises content and regulatory issues persist, Pearson's digital offerings and assessment contracts could lose relevance, eroding its position in education and training.
Pearson keeps adding AI tools for skills assessment and enterprise training while its virtual learning and qualifications segments post steady gains. Our models see it as overvalued as much of that outlook already sits in the numbers. Will the new AI push ultimately lift margins more than the stability of its core assessment business already provides?
Price, fair value, quality and upside side by side.
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Peer GroupⓘHow this stock ranks against its industry: the green marker is this stock, the band is the typical 25–75% peer range, and the tick is the median.Publishing · 98 stocks
Beats the industry median on 6/15 measures
A mixed picture versus its industry peers.
Valuation
Quality Score74 · Top 25%
Fair Value upside−15.4% · Below median
Profitability
Return on equity (12 months)9.2% · Above median
Return on assets5.2% · Above median
Net margin (12 months)8.8% · Above median
Operating margin (12 months)13.3% · Above median
Growth and dividend
Revenue growth (quarter YoY)3.3% · Above median
Dividend yield (12 months)2.0% · Below median
Balance sheet
Debt / equity0.28× · Highest 25%
Valuation Multiplesvs Publishing median · lower = cheaper
P/E (12 months)25.9× · Priciest 25%
P/B2.21× · Priciest 25%
P/S (12 months)2.22× · Priciest 25%
Price / free cash flow (fiscal year)12.2× · Pricier than median
For bloggers, editors and developers: paste this into your site or blog (a “Custom HTML” block in WordPress), it shows the current fair value and links back here. Free, plain HTML, and welcome. Full data streams (CSV/JSON) at /developers.
Cite: Fair Value Calculator (2026). "Pearson PLC Fair Value". https://www.fairvalue-calculator.com/stock/PSON
Frequently asked questions
Is Pearson PLC (PSON) overvalued or undervalued?
As of Nov 1, 2026, our model estimates a fair value of £10.95 versus a price of £12.95, about 15% lower (overvalued).
What is the fair value of PSON?
Our model-based fair value for Pearson PLC is £10.95 (as of Nov 1, 2026), built from audited fundamentals. The current price: £12.95.
What is the quality score of PSON?
Pearson PLC has a Quality Score of 74/100. It measures business quality (profitability, growth, cash flow, balance-sheet strength, investment discipline, share issuance). Market factors such as price momentum and volatility do not enter the number; they are shown separately in the detail view.
What is the price target for Pearson PLC (PSON)?
Our model-based price target is the fair value of £10.95 (as of Nov 1, 2026) from 24 valuation models. Cautious scenario £7.56, optimistic scenario £14.33. It is a calculation from audited fundamentals, not an analyst target.
What is the Pearson PLC stock forecast for 2026?
Our models put fair value at £10.95, about 15% lower versus a price of £12.95 (overvalued). Cautious scenario £7.56, optimistic scenario £14.33. The calculation is refreshed regularly with new filings.
What is the revenue of Pearson PLC (PSON)?
Pearson PLC reported trailing-twelve-month revenue of about £3.6B (latest available figure, as of Nov 1, 2026).
Does Pearson PLC pay a dividend?
Pearson PLC currently shows a dividend yield of 1.98% relative to its recent price (as of Nov 1, 2026).
What growth is priced into Pearson PLC (PSON)?
For today's price to be fair in a discounted-cash-flow model, Pearson PLC would have to grow free cash flow by +2.1 % per year for five years (discount rate 9.8 %, then slowing evenly to 2 % perpetual growth by year ten). Over the last 5 years revenue grew +1.0 % per year. As of Nov 1, 2026.
What discount rate (WACC) does the fair value of PSON use?
Our models discount Pearson PLC at 9.8 %: a base by market capitalisation (large), country premium for United Kingdom. The same rate applies in all 26 models.
What is a reverse DCF?
A reverse DCF turns the usual calculation around. Instead of deriving a value from assumptions, it takes today's price as given and asks: what free-cash-flow growth would a company have to deliver for exactly this price to be fair? The result is not a forecast but the expectation already priced in. For Pearson PLC that is +2.1 % per year a year over ten years, using the same discount rate (9.8 %) and the same formula as our fair value.
How much growth has Pearson PLC (PSON) delivered so far?
Over the past 5 years revenue at Pearson PLC grew +1.0 % a year. The price currently implies +2.1 % per year free-cash-flow growth a year. Comparing the two shows how much confidence is in the price: if it demands more than has been delivered, the business has to accelerate for the maths to work.
How fast is the sector of Pearson PLC (PSON) growing?
The median revenue growth in the sector is +3.8 % a year. That is the yardstick for the growth priced into Pearson PLC (+2.1 % per year a year): it shows whether the expectation is within the usual range or beyond it.
What is the free cash flow yield of Pearson PLC (PSON)?
The free-cash-flow yield on the price is 8.20 %: that much free cash flow Pearson PLC produces per unit of market value. When it exceeds the discount rate of our models (9.8 %), the business already earns more than its cost of capital demands, and the price needs little additional growth.
What is the intrinsic value of Pearson PLC (PSON)?
Intrinsic value and fair value mean the same thing: what the business is worth on its numbers, independent of the share price. For Pearson PLC it is £10.95 per share (as of Nov 1, 2026), against a price of £12.95. It is the blended result of 24 valuation models (cash flow, earnings, asset, dividend).
Is Pearson PLC stock overvalued or undervalued in 2026?
As of Nov 1, 2026, PSON trades above its calculated fair value: price £12.95, fair value £10.95, a gap of about −15% (overvalued). The calculation is refreshed with each new quarterly report, so the verdict can change during the year.
Is fair value the same as the market price of PSON?
No. The price is what the market pays today (£12.95); the fair value is what the company's own numbers justify (£10.95). For Pearson PLC the two are £2.00 per share apart. That gap is exactly why we show both numbers side by side.
How much is Pearson PLC worth?
The market values Pearson PLC at about £8.1B (market capitalisation, as of Nov 1, 2026). Per share that is £12.95; our models calculate a fair value of £10.95 per share.
What do the bullish and bearish scenarios say about PSON?
Our models span a range for Pearson PLC: cautious scenario £7.56, base £10.95, optimistic £14.33 per share (as of Nov 1, 2026, price £12.95). The range comes from different growth and margin assumptions, not from analyst opinions.
What is the P/E ratio of PSON?
Pearson PLC trades at a price-to-earnings ratio of 25.9 (as of Nov 1, 2026). A P/E on its own says little: it compares the price with ONE year of profit, while our fair value of £10.95 is built from several models across several years. Excluding one-off items of fiscal year 2025 it is 20.4 (reported for FY2025: 25.2). Median P/E at fiscal year-end, 9 fiscal years (2017 to 2025), reported earnings, FY2025 ex one-offs: 18.3. Other multiples: PEG 1.7, P/B 2.2, P/S 2.2, EV/EBITDA 14.5.
What is the PEG ratio of PSON?
The PEG ratio of Pearson PLC is 1.70 (P/E divided by earnings growth, as of Nov 1, 2026). That is above 1, so the growth is already paid for in the price.
How solid is the balance sheet of Pearson PLC (PSON)?
Balance-sheet figures for Pearson PLC (as of Nov 1, 2026): return on equity 9.2%, debt of 0.28 per unit of equity. They feed the Quality Score of 74/100, which measures business quality independently of the share price.
How far is PSON from its 52-week high?
Pearson PLC trades at £12.95, about 6% below its 52-week high of £13.75 and 45% above the low of £8.91 (as of Nov 6, 2026). Distance from the high says nothing about value: that is what the fair value of £10.95 is for.
Which stocks are comparable to Pearson PLC?
From the same area (Communication Services) we also value The New York Times Company, Xinhua Winshare Publishing and Media Co, Jiangsu Phoenix Publishing & Media Corporation, China Science Publishing & Media Ltd, among others. Each of them has its own fair-value calculation on this site using the same models, so the comparison is like for like.
Is Pearson PLC stock attractive at the current price?
The data as of Nov 1, 2026: price £12.95, calculated fair value £10.95 (−15%), Quality Score 74/100, from 24 models. Whether that fits your horizon and risk tolerance is your call. We provide the calculation, not investment advice.
How is the fair value of PSON calculated?
We run Pearson PLC through 24 models from four families: discounted cash flow, earnings models, asset and balance-sheet models, and dividend models. Every model gets the same audited fundamentals; the result is the weighted average of £10.95, with the spread shown as a cautious and an optimistic scenario.
Is it still worth investing in stocks now?
The global stock market currently sits 15.5% above its aggregate fair value. Pearson PLC itself currently trades above fair value. An expensive market is no reason to stay out and no reason to buy everything at once: keep a broad savings plan running, buy single stocks only with money you can do without, and hold part of your money liquid while the market is high. The full picture including sectors is on is it worth investing now.
What is the share price of Pearson PLC (PSON)?
The closing price on Nov 6, 2026 was £12.95. Our model-based fair value is £10.95, about 15% lower (overvalued). We carry closing prices from our data provider, not a live tick.
What should I pay attention to with Pearson PLC right now?
Solid but not exceptional quality (74/100) and above fair value, neither a clear bargain nor a standout compounder. A fairly wide model range (£7.56 to £14.33) leaves room in how you read the outcome.
Key figures of Pearson PLC
How large is the market capitalisation of Pearson PLC (PSON)?
The market capitalisation of Pearson PLC is £8.1B. The stock-market value of the whole company: share price times number of shares. It is what the market asks for the entire business today.
What is the P/S ratio of Pearson PLC (PSON)?
The price-to-sales ratio of Pearson PLC is 2.22 (last twelve months). Price to sales: market value relative to yearly revenue. Useful when profit is thin or distorted.
What are the earnings per share of Pearson PLC (PSON)?
Earnings per share at Pearson PLC are £0.5000 (price ÷ EPS = P/E 25.9). Earnings per share over the last twelve months: total profit spread across every single share.
What is the dividend yield of Pearson PLC (PSON)?
The dividend yield of Pearson PLC is 2.0% (payout 41.4%, on adjusted earnings, reported 51.2%). Yearly dividend relative to the share price. 3% pays 3 per 100 invested. Below: how much of profit is used for it.
What is the net margin of Pearson PLC (PSON)?
The net margin of Pearson PLC is 8.8% (last twelve months). How much of every unit of revenue ends up as profit. 10% means 10 cents of profit per dollar of sales.
What is the return on equity of Pearson PLC (PSON)?
The return on equity (ROE) of Pearson PLC is 9.2% (last twelve months). Profit relative to shareholders' equity, how efficiently the company works with its owners' money.
What is the EBIT return on assets of Pearson PLC (PSON)?
On an EBIT basis the return on assets of Pearson PLC is 5.9% (avg 5y). Operating profit (EBIT) relative to everything the company owns, as a multi-year average. It describes the business model rather than one good or bad year.
What is the operating margin of Pearson PLC (PSON)?
The operating margin of Pearson PLC is 13.3% (last twelve months). Profit from the core business (before interest and taxes) relative to revenue.
How fast is revenue growing at Pearson PLC (PSON)?
Revenue at Pearson PLC is growing +3.3% versus a year earlier (3y avg −2.3%). How much revenue grew versus a year earlier (YoY). The 3-year average next to it puts the single year in context.
How fast are earnings growing at Pearson PLC (PSON)?
Earnings per share at Pearson PLC are growing −2.9% versus a year earlier. How much earnings per share grew versus a year earlier.
How much net debt does Pearson PLC (PSON) carry?
The net debt of Pearson PLC is £1.6B (fiscal year 2025, ≈ 2.4 yrs of FCF). Debt minus cash on hand. The note shows how many years of free cash flow could in theory pay it off.
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Broad data
Nov 1, 2026