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ZYBERNO

Stock Report

Updated Aug 31, 2026

MCGRAW HILL, INC. (MH)

NYSE

$13.22

Professional Investment Analysis

ZYBERNO SCORE →

Is it a great business? Is it getting better?

52.0/100

AVERAGE BUSINESS

MCGRAW HILL, INC. (MH) scores 52/100 — decent metrics but limited evidence of durable competitive advantage.

📊 How is the Zyberno Score calculated? +

The Zyberno Score answers one question: "Is this a quality business worth owning?" It's a 0-100 investment grade that evaluates business fundamentals across four critical dimensions, based on principles from Warren Buffett, Benjamin Graham, Peter Lynch, and Charlie Munger.

The 4 Core Categories (25 points each):

1. PROFITABILITY (25 pts)

Metrics: ROE, ROIC, Net Margin, Operating Margin
Thresholds: ROE >20% excellent • ROIC >20% excellent • Net Margin >20% excellent • Operating Margin >25% excellent

2. FINANCIAL STRENGTH (25 pts)

Metrics: Debt-to-Equity, Current Ratio, Interest Coverage, Altman Z-Score
Thresholds: D/E <0.3 excellent • Current Ratio >2.5 excellent • Interest Coverage >10x excellent • Altman Z >3.0 safe

3. CASH FLOW QUALITY (25 pts)

Metrics: Free Cash Flow, OCF vs Net Income, FCF Margin
Thresholds: Positive & growing FCF excellent • OCF/NI >1.2x excellent (cash earnings exceed accounting)

4. GROWTH & CONSISTENCY (25 pts)

Metrics: Revenue Growth, Net Income Growth, FCF Growth, Piotroski F-Score
Thresholds: Growth via log-linear regression • Piotroski 8-9 excellent, 6-7 good

Score Interpretation:

75-100

GREAT BUSINESS

65-74

GOOD BUSINESS

50-64

AVERAGE BUSINESS

30-49

WEAK BUSINESS

0-29

POOR BUSINESS

→ View full MH quality analysis & detailed breakdown

VALUATION SIGNAL

MARGIN OF SAFETY

Is this stock cheap or expensive relative to what the business has historically generated for owners?

Margin of Safety unavailable — insufficient data for the owner-earnings DCF.

BRINA GAP ↗

Is the market underestimating or overestimating what this business is capable of going forward?

-7.5%

Market Overestimates

💰 How is Margin of Safety calculated? +

Margin of Safety measures how much discount or premium you're paying relative to a stock's intrinsic value. It's Benjamin Graham's core principle: the larger the margin, the lower your downside risk.

Formula: (Intrinsic Value − Current Price) ÷ Intrinsic Value × 100%

How We Calculate Intrinsic Value (DCF Method):

Step 1: Calculate current Owner Earnings (OCF − Maintenance CapEx)

Step 2: Calculate company-specific growth rate using log-linear regression on 16 quarters of Owner Earnings

Step 3: Project 10 years forward using the calculated growth rate

Step 4: Discount each year's cash flow to present value using 10% discount rate

Step 5: Calculate terminal value using 3% perpetual growth rate

Step 6: Sum all discounted cash flows = Intrinsic Value

What The Percentages Mean:

+50% or more

EXCELLENT — Very undervalued

+25% to +50%

GOOD — Attractive discount

0% to +25%

FAIR — Reasonable value

0% to -25%

CAUTION — Slight premium

-25% or worse

POOR — Overvalued

"Price is what you pay, value is what you get." — Warren Buffett

→ View full MH valuation analysis · → View full MH Brina Gap analysis

📈 How is Brina Gap calculated? +

Brina Gap measures the difference between the growth a business can fundamentally sustain and the growth the market is already pricing in.

Formula: Fundamental Growth Rate − Market-Implied Growth Rate

The Two Components:

Fundamental Growth Rate = ROIC × Reinvestment Rate

What the business can sustainably grow at based on how much it reinvests and what return it earns on that capital. Grounded in historical financials.

Market-Implied Growth Rate = Reverse DCF

The growth rate the current Enterprise Value implicitly assumes. Calculated by back-solving a 10-year DCF model (10% WACC, 3% terminal growth) until the present value of projected cash flows equals EV.

What The Gap Means:

Gap > +5% Market Underestimates — potential upside

+2% to +5% Slight Underestimate

-2% to +2% Fairly Priced — market consensus matches fundamentals

-5% to -2% Slight Overestimate

Gap < -5% Market Overestimates — price embeds optimism fundamentals don't support

A positive gap (market underestimates) combined with a positive Margin of Safety is the strongest combined signal — the business is both cheap historically and forward economics are stronger than the price suggests.

Critical Financial Health Indicators

Return on Equity (Profitability):EXCELLENT (25.7%)

Debt-to-Equity (Solvency Risk):CRITICAL (3.41x)

Operating Margin (Operational Efficiency):EXCELLENT (25.9%)

Return on Capital (Capital Efficiency):AVERAGE (14.0%)

📊 Valuation Trilogy

Three interconnected metrics for complete valuation analysis

Click any metric for full methodology and detailed analysis

Zyberno's Verdict

MCGRAW HILL, INC. (MH) stock report — Zyberno Score 52/100 (AVERAGE BUSINESS). Full financial analysis on Zyberno.

According to Zyberno's DCF model, MCGRAW HILL, INC. (MH) shows a Brina Gap of -7.5%, which weakens the case: based on the company's ROIC (14.0%) and reinvestment rate (-59.9%), the business can fundamentally grow at -8.4% — but the current enterprise value implies the market expects -0.9%.

Over the trailing twelve months, MH generated $335.92M in Owner Earnings. Capital was deployed as follows: $92.51M invested in capital expenditures. Reinvestment rate: -59.9%.

DIVISION I: EXECUTIVE SUMMARY

A. Market Valuation

Market Price & Capitalization (2)

Current Price:13.22

Market Cap:$2.53B

Valuation Multiples (4)

P/E Ratio:

12.47x

📊 Click to view full MH P/E analysis →

P/B Ratio:3.21x

P/S Ratio:1.19x

Peg Ratio:-999.00x

Enterprise Metrics (3)

Enterprise Value:$5.03B

Ev Ebitda Ratio:4.95x

Pfcf Ratio:7.53x

Price Action & Momentum (1)

% of 52-Week High:73.4%

B. Profitability Assessment

Return Metrics (7)

ROE:

25.7%

📊 Click to view full MH ROE analysis →

ROA:3.5%

Roic:

14.0%

📊 Click to view full MH ROIC analysis →

Reinvestment Rate:-59.9%

Fundamental Growth Rate (g):-8.4%

Market-Implied Growth Rate:-0.9%

Brina Gap:

-7.5%

☷ Click to view full MH Brina Gap analysis →

Margin Analysis (3)

Operating Margin Ttm:25.9%

Net Margin Ttm:9.4%

Ebitda Margin:48.1%

TTM Performance (3)

Gross Margin Ttm:81.7%

Operating Margin Ttm:25.9%

Net Margin Ttm:9.4%

Yield Metrics (3)

Earnings Yield:$8.02

Owner Earnings Yield:$13.29

Dividend Yield:0.0%

C. Log-Linear Regression Growth Trends

Revenue Growth (Linear) (1)

Revenue Growth Rate (Linear):-11.9%

Earnings Growth (Linear) (1)

Net Income Growth Rate (Linear):100.0%

Operating Growth (Linear) (1)

Operating Income Growth Rate (Linear):36.9%

D. Financial Stability

Liquidity Ratios (3)

Current Ratio:0.78x

Quick Ratio:0.62x

Cash Ratio:0.17x

Leverage Analysis (3)

Debt To Equity Ttm:3.41x

Debt-to-Equity Ratio:3.41x

Debt To Ebitda:2.65x

Coverage Ratios (1)

Times Interest Earned:-999.00

Capital Structure (4)

Working Capital:-257,144,000.00

Cash And Cash Equivalents:193,637,000.00

Long Term Debt:$2.56B

Net Debt:$2.51B

DIVISION II: FINANCIAL STATEMENTS ANALYSIS

A. Income Statement Analysis

Revenue Components (2)

Revenue TTM: $2.12B

Linear Growth: -11.9%

📊 Click to view full MH Revenue analysis & methodology →

Cost Of Revenue Ttm:$0.00

Profitability Breakdown (2)

Gross profit TTM: $1.73B

Linear Growth: -7.1%

📊 Click to view full MH Gross Profit analysis & methodology →

Operating income TTM: $547.59M

Linear Growth: 36.9%

📊 Click to view full MH Operating Income analysis & methodology →

Bottom Line Performance (3)

Net income TTM: $198.46M

Linear Growth: 100.0%

📊 Click to view full MH Net Income analysis & methodology →

Income Before Tax:$196.52M

Ebitda Ttm:1,017,662,000.00

Operating Expenses (5)

Operating Expenses:1,433,678,000.00

R And D Expense:270,640,000.00

Sga Expense:380,392,000.00

Income Tax Expense:-$1.94M

Interest Expense:0.00

Expense Ratios (3)

R And D To Revenue Percentage:49.2%

Sga To Revenue Percentage:69.2%

Ebitda Margin:48.1%

B. Balance Sheet Analysis

Asset Composition (5)

Total Assets:$5.38B

Current Assets:$888.06M

Ppe Net:0.00

Goodwill:2,522,595,000.00

Intangible Assets:$0.00

Liability Structure (4)

Total Liabilities:4,590,262,000.00

Current Liabilities:1,145,206,000.00

Long Term Debt:$2.56B

Short Term Debt:$138.55M

Equity & Capital (3)

Equity:$788.39M

Retained Earnings:-$1.19B

Common Stock:2,000,000,000.00

Working Capital Items (3)

Accounts Receivable:377,884,000.00

Inventory:183,213,000.00

Accounts Payable:118,740,000.00

Special Items (2)

Contract Liabilities:1,522,156,000.00

Stock Based Compensation:3,884,000.00

C. Cash Flow Analysis

Operating Activities (2)

$428.43M$335.92M

Investment Activities (2)

Investing Cash Flow:-$58.29M

Capital Expenditures Ttm:92,508,000.00

Financing Activities (3)

Financing Cash Flow:-$3.15M

Dividends Paid Ttm:0.00

Stock Repurchase:0.00

Capital Transactions (3)

Common Stock Issuance:1,500,000.00

Long Term Debt Issuance:$0.00

Long Term Debt Repayments:$0.00

Non-Cash Items (1)

Depreciation Amortization Ttm:470,075,000.00

DIVISION III: OPERATIONAL METRICS

A. Per Share Analysis

Earnings Per Share (3)

EPS (Basic TTM):1.06

$1.06

Earnings Per Share Ttm:$1.04

Revenue & Cash Per Share (3)

Sales Per Share Ttm:11.07

Operating Cash Flow Per Share:$1.73

Fcf Per Share Ttm:1.76

Book Value & Capital (2)

Book Value Per Share:$4.12

Cash Per Share:1.01

Dividend Policy (1)

Dividend Payout Ratio:0.00x

B. Operational Efficiency

Asset Utilization (2)

Asset Turnover Ttm:0.38x

Working Capital Turnover Ttm:-999.00x

Receivables Management (2)

Receivables Turnover Ttm:5.60x

Days Sales Outstanding Ttm:65.15

Inventory Management (2)

Inventory Turnover Ttm:11.55x

Days Inventory Outstanding Ttm:31.59

Payables & Cash Cycle (2)

Days Payable Outstanding:20.47

Cash Conversion Cycle:76.27

C. Quality & Risk Metrics

Financial Quality Scores (2)

Financial Strength Score:0.00

Quality Score:70.00

Market Metrics (2)

Beta:0.00x

Volatility Category:unknown

DIVISION IV: INVESTMENT ANALYSIS

A. Value Investment Framework

Owner Earnings Analysis (3)

Owner earnings TTM: $335.92M

Linear Growth: 0.0%

📊 Click to view full MH Owner Earnings analysis & methodology →

Owner Earnings Per Share:$1.76

Owner Earnings Yield:$13.29

Damodaran Growth Analysis (4)

Reinvestment Rate:-59.9%

Fundamental Growth Rate (g):-8.4%

Market-Implied Growth Rate:-0.9%

Brina Gap:

-7.5%

☷ Click to view full MH Brina Gap analysis →

Return Scenarios (1)

Forward Expected Return (Yield + Growth):

4.9%

📊 Click to view full MH expected return analysis →

Investment Assessment (1)

Buffett Assessment:Overvalued

B. Log-Linear Regression Growth Analysis

Growth Rates (Log-Linear Regression) (3)

Revenue Growth Rate (Linear):-11.9%

Net Income Growth Rate (Linear):100.0%

Operating Income Growth Rate (Linear):36.9%

Other Growth Rates (2)

Gross Profit Growth Rate (Linear):-7.1%

Book Value Growth Rate (Linear):100.0%

C. Company Profile & Context

Corporate Information (6)

Symbol:MH

Company Name:MCGRAW HILL, INC.

Sector:Unknown

Industry:Miscellaneous Publishing

Exchange:NYSE

Country:United States

Market Classification (3)

Market Cap Category:N/A

Price Category:medium

Volume Category:N/A

Share Structure (3)

Shares Outstanding:191.25M

Shares Outstanding Basic:191.25M

Shares Outstanding Diluted:191.31M

Data Processing Info (3)

Processing Version:v3.0

Last Updated:2026-08-31 02:01:00 UTC

Data Timestamp:2026-08-31T02:01:00.433089