MH Stock Forecast & Price Target

McGraw Hill is well positioned by its digital-first transformation, recurring revenue mix, and strong operating leverage, with 2Q27 revenue of $549.9mm and adjusted EBITDA of $207.0mm, reflecting 37.7% margins and 8.7% digital growth. Its outlook is reinforced by sustained share gains in Higher Education, where revenue rose 10% Y/Y to $199.8mm, and by K-12 momentum from the science of reading supercycle, which could expand the ELA market by up to 10% over time as 44 states align with that framework. Strategic tuck-in acquisitions Teachally and TeachFX broaden the company’s AI-enabled product set and open new markets, while S&P’s upgrade to BB- and expectation of leverage below 4x through FY28 underscore improving credit quality and financial resilience.

McGraw Hill is facing a negative fundamental setup because weaker-than-expected enrollment trends, especially in Higher Education, threaten demand in a business that is already exposed to discretionary spending and cyclical adoption timing. Its dependence on proprietary content and digital platforms is increasingly vulnerable to AI-enabled disruption, copyright leakage, and rising competition from well-capitalized peers, open educational resources, and state-developed curricula that could erode pricing power and market share. The company’s elevated debt load further tightens financial flexibility, making it harder to absorb lower capture rates, slower EBITDA conversion to free cash flow, or any disruption in the FY27-FY29 procurement upcycle.