Stock fact sheet · data as of
Pearson plc (PSO): fair value, margin of safety and Wheel Score
Communication Services · Publishing · United Kingdom · ADR · Defensive
Is PSO undervalued?
At 17.31 (close of 16 Oct 2026), PSO trades 16% under the GLS average fair value of 20.66. 4 of the 9 models that produced a value land above the price. A discount of this size counts as a positive margin of safety in every GLS screen; whether it is enough depends on the rest of the picture - the health score, the moat and the option premium below.
The 9 models disagree widely: DDM gives 3.77 while DCF gives 62.41. A spread that wide means the average is sensitive to which methods you trust; the model table below shows where each one lands, and the Quote page lets you switch any of them off.
The nightly engine files PSO under Defensive: a low beta, a dividend and positive earnings.
Nine valuation models for PSO
Each model turns the latest filed numbers into a value per share; the GLS fair value is the simple average of the ones that produce a positive number. The last two rows are shown for reference and never enter the average. The Quote page lets you switch any model off and add your own margin of safety.
| Model | Value | vs price | What it measures |
|---|---|---|---|
| DCF | 62.41 | +261% | Present value of the projected free cash flows, discounted at the cost of capital |
| Graham Number | 7.95 | -54% | The most a defensive investor pays for the earnings and book value per share |
| Graham Growth | 20.50 | +18% | Graham's growth formula: EPS × (8.5 + 2 × growth), adjusted for bond yields |
| Lynch | 7.63 | -56% | EPS × the earnings growth rate (PEG of 1), growth capped at 25% |
| GLS Growth | 11.03 | -36% | EPS compounded ten years at the blended growth rate, discounted back at 15% a year |
| 10 Cap | 31.13 | +80% | Owner's earnings (operating cash flow less maintenance capex) capitalised at 10% |
| Payback Time | 34.08 | +97% | Eight years of compounded free cash flow: the price at which the business pays for itself |
| DDM | 3.77 | -78% | Dividend discount model: next year's dividend ÷ (10% − 3% growth); needs a dividend |
| EPV | 7.45 | -57% | Earnings power value: current EPS capitalised at 9% with no growth |
| Zombie (liquidation) | -0.7889 | -105% | Current assets less all liabilities, per share: the balance-sheet floor. Not in the average |
| Wall St target | 14.50 | -16% | Analysts' average 12-month price target. Not in the average |
Quality and financial health
On financial health PSO scores 8/9 (Piotroski): most of the nine tests - positive earnings and cash flow, falling debt, rising margins and turnover - are passed, which is the kind of balance sheet a wheel trader is happy to be assigned. The GLS Moat score is 6.0 out of 10: a ten-year record that is consistent in some of the metrics the score tracks (revenue, earnings, margins, cash flow, returns on capital) and patchy in others.
Returns on capital are moderate - ROIC 6.4%, ROE 9.0%, ROA 5.1% - with debt at 0.41 times equity and a free-cash-flow yield of 9.8%.
The dividend yield is 1.92% at a payout ratio of 50%; for a wheel trader holding assigned shares the dividend adds to the covered-call premium, and the ex-dividend date is worth knowing before a call is sold.
Institutional ownership scores 1/10, insider activity 5/10 and Congressional trading 5/10 on the GLS smart-money scales.
| Piotroski F-score | 8 / 9 | ROIC | 6.4% |
|---|---|---|---|
| GLS Moat | 6.0 / 10 | ROE | 9.0% |
| Debt / equity | 0.41 | ROA | 5.1% |
| Free-cash-flow yield | 9.8% | Payout ratio | 50% |
| Institutions | 1 / 10 | Insiders · Congress | 5 · 5 / 10 |
Wheel Score 79: Good
PSO scores 79 out of 100 on the Wheel Score (Good band, 65-79). The score blends the margin of safety (Value, 19/25), Piotroski health (18/20), the GLS moat (9/15), the option premium on offer (16/20) and how easily the stock trades (18/20). Moat (9/15) is the part holding the score back.
Implied volatility is 31% on the near-the-money contracts 20-60 days out: some premium, but under the 35-60% range the Wheel Score pays full marks for (16 of 20 points). Chain open interest is thin - 1,130 contracts across every expiry - so fills at a fair price are not guaranteed; a 30-45-day put may not exist at a usable strike.
Volume runs at 811k shares a day on a market cap of $10.4B, with a beta of -0.03 - a low beta, so day-to-day moves are smaller than the market's; the Stability part of the Wheel Score gives that 18 of 20.
| Part | Points | From | |
|---|---|---|---|
| Value | 19 / 25 | 16% margin of safety | |
| Health | 18 / 20 | Piotroski 8/9 | |
| Moat | 9 / 15 | moat 6.0/10 | |
| Premium | 16 / 20 | implied volatility 31% | |
| Stability | 18 / 20 | 811k shares/day, $10.4B cap, beta -0.03 |
The Wheel Score ranks ~7,400 US stocks for selling cash-secured puts and covered calls; it is updated nightly and is not a recommendation. The walkthrough lesson shows how the score fits into a trade, start to finish.
Upcoming events
No upcoming earnings date is recorded for PSO in the nightly calendar.
Earnings, dividend, IPO, split and economic calendars for the whole market, filterable to your watchlists.
Similar stocks in Publishing
The 12 companies below are the closest to Pearson plc by market cap within the Publishing industry, each with its own fact sheet; the Compare page puts up to eight of them side by side.
| Stock | Close | Fair value | MoS | Wheel | Mkt cap |
|---|---|---|---|---|---|
| NYT The New York Times Company | 68.94 | 66.66 | -3% | 82Prime | $11.1B |
| NWSA News Corporation | 30.22 | 31.98 | +5% | 76Good | $16.9B |
| NWS News Corporation | 33.06 | 32.39 | -2% | 74Good | $17.8B |
| WLYB John Wiley & Sons, Inc. | 51.23 | 94.15 | +46% | 39No options | $2.7B |
| WLY John Wiley & Sons, Inc. | 51.49 | 100.65 | +49% | 81Prime | $2.6B |
| TDAY USA TODAY Co. Inc. | 7.15 | 23.62 | +70% | 45Weak | $1.0B |
| SCHL Scholastic Corporation | 38.94 | 61.77 | +37% | 78Good | $735M |
| GWOX The Goodheart-Willcox Company, Inc. | 360.00 | 346.52 | -4% | 34No options | $168M |
| LEE Lee Enterprises, Incorporated | 6.73 | 190.02 | +96% | 39No options | $150M |
| CMTX COMTEX News Network, Inc. | 5.25 | 131.86 | +96% | 37No options | $83M |
| DTRL The Detroit Legal News Company | 312.00 | 1,251.41 | +75% | 39No options | $12M |
| IDWM IDW Media Holdings, Inc. | 39.05 | 51.03 | +23% | 39No options | $11M |
⚖ Compare PSO with 7 of them All Communication Services stocks →
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Start free See the Sunday ScanQuestions about PSO
Is PSO undervalued right now?
By the GLS models, moderately: at 17.31 the stock trades 16% below the average fair value of 20.66 (data as of 16 Oct 2026).
What is the Wheel Score of PSO and what does it mean?
PSO scores 79 out of 100 (Good). The Wheel Score blends the margin of safety (25 points), Piotroski health (20), the GLS moat (15), the option premium on offer (20) and trading stability (20) into one number that ranks stocks for the wheel strategy - selling cash-secured puts, then covered calls if assigned. 80 and above is Prime, 65-79 Good, 50-64 Fair, under 50 Weak.
What is the GLS fair value for PSO?
20.66 per share as of 16 Oct 2026 - the simple average of the 9 valuation models (out of nine: DCF, Graham Number, Graham Growth, Lynch, GLS Growth, 10 Cap, Payback Time, DDM and EPV) that produced a positive value. The models run every night on the latest filings; the Quote page lets you switch any of them off and add a margin of safety of your own.
When does Pearson plc report earnings next?
No upcoming earnings date is recorded for PSO in our calendar as of 16 Oct 2026; the Calendars page is refreshed every morning.
Does PSO have listed options, and how liquid are they?
Yes. The nightly snapshot found 110 listed contracts with 1,130 open interest across all expiries and implied volatility of 31% on the near-the-money contracts. The Options scanner lists the cash-secured put and covered call set-ups with premium and annualised yield worked out.