Pearson plc research snapshot
PSO AI stock analysis as of the August 3, 2026 data cutoff reads Pearson as a sound education and assessment franchise with improving execution and a price above the analyst consensus target. Pearson reported H1 2026 revenue of £1.779 billion, up 4% on an underlying basis, adjusted operating profit of £276 million, up 14% with a 15.5% margin, adjusted EPS of 28.9 pence, up 18%, and free cash flow of £259 million, up £103 million, and reiterated full-year 2026 guidance of mid-single digit underlying growth, £640 million to £685 million of adjusted operating profit, and 90% to 100% free cash flow conversion. The stock closed at $16.94 on July 31, 2026, after touching a new 52-week high of $17.75 intraday on July 29 and then selling off on the report. The market cap cross-validates near $10.2 billion, and price remains above the 50-day and 200-day averages while the RSI cooled from overbought to 55.69. The PSO AI stock forecast therefore uses scenario ranges, not a point prediction. This page is an information tool, not investment advice.
Current price
$16.94 last reported close (July 31, 2026)
Market cap
$10.17 billion vendor snapshot, cross-validated at $10.18 billion from $16.94 times the 601.14 million SEC-filed voting shares
AI score
66 / 100
Rating
Improving execution in a mature market, priced above the analyst consensus target
Trend status
Uptrend above the 50-day and 200-day moving averages, but pulled back after the July 31, 2026 results
Data cutoff (updated monthly)
August 4, 2026
Informational use only. This page is not investment advice.
| Dimension | Conclusion | Confidence |
|---|---|---|
| Business quality | Pearson sells courseware, assessments, qualifications, English testing, virtual learning, and workforce skills services. Customers pay for trusted content, test delivery, credentials, and learning outcomes. | High |
| Moat | Assessment trust, qualification relationships, content libraries, delivery infrastructure, and institutional integrations create a moderate moat. Students, schools, employers, and regulators can still switch or use alternatives, and US Student Assessment fell 6% after losing the New Jersey contract. | Medium |
| Management | CEO Omar Abbosh, ex-Microsoft, is executing on capital returns and digital growth. H1 2026 saw a completed £350 million buyback at an average 998 pence, a 5% higher interim dividend, and 10 strategic partner agreements including a leading AI lab. Net debt still rose to £1.3 billion as buybacks, the eDynamic acquisition, and dividends outpaced cash generation. | Medium-high |
| Financial trend | H1 2026 revenue was £1.779 billion, up 4% underlying, adjusted operating profit was £276 million, up 14% with a 15.5% margin, free cash flow rose to £259 million, and adjusted EPS grew 18% to 28.9 pence. Statutory profit for the period fell to £149 million from £166 million due to finance and tax items. | High |
| Valuation | At $16.94, vendor inputs show about 24.03x trailing PE, 2.28x PB, 9.86x price to free cash flow, and a 10.14% free cash flow yield. The two-analyst consensus is Sell with a $15.70 average target, below the current quote. | Medium |
| Technical trend | Price closed at $16.94 on July 31, above the $15.92 50-day average and $14.18 200-day average, with RSI at 55.69 after a 52-week high of $17.75 on July 29. The uptrend is intact but momentum cooled after the results. | Medium |
| Risk level | Risk is medium to high. Pearson faces PTE pressure from tight migration policy and geopolitical disruption, US Student Assessment contract loss, assessment timing, AI content substitution, competition, foreign exchange exposure, higher net debt, and execution risk on platform changes. | High |
| AI confidence | AI confidence is high for reported financials, guidance, and arithmetic that cross-validated across StockAnalysis.com, StockTitan, the H1 2026 release, and SEC filings. It is lower for technical momentum, future margins, and the ADR price direction. | High for data |
| Investment certainty | Investment certainty is medium. The business has real assets and repeat demand, but the current quote is above the analyst average target and requires continued execution while the market has already rewarded recent momentum. | Medium |
PSO AI stock forecast
The PSO AI stock forecast uses a three-year scenario model around the $16.94 quote and the FY2026E adjusted EPS consensus near $0.95, derived from the 70 pence consensus at the £:$ 1.35 guide rate. With explicit EPS growth and terminal multiple assumptions, the exact model produced $25.30 in the bullish case, $18.10 in the base case, and $9.80 in the bearish case. These are scenario outputs, not promised prices.
$22 to $28
More likely if Pearson compounds adjusted EPS at about 10% a year, English Language Learning returns to growth in Q4 as guided, Virtual Learning keeps enrolment gains near 15%, Enterprise partnerships keep expanding, margins rise toward the medium-term 40 bps per annum path, and the market holds a higher multiple. The model uses 10% annual EPS growth and a 20x terminal PE.
$16 to $21
More likely if management meets its reiterated 2026 guidance of mid-single digit growth, £640 million to £685 million of adjusted operating profit, and 90% to 100% free cash flow conversion, but revenue stays a mid-single digit business and the market keeps Pearson near a mature education services multiple. The model uses 6% annual EPS growth and a 16x terminal PE.
$8 to $12
More likely if migration restrictions keep cutting PTE demand, US Student Assessment loses more contracts, higher education stays weak, AI reduces content pricing power, net debt keeps rising, or investors cut the multiple. The model uses 5% annual EPS contraction and a 12x terminal PE.
PSO AI technical analysis
PSO AI technical analysis as of the August 3, 2026 data cutoff uses the latest public market snapshot. StockAnalysis.com reported a $15.92 50-day moving average, a $14.18 200-day moving average, a 55.69 RSI, a 20-day average volume of 840,312 shares, and a 52-week range of $12.02 to $17.75. The stock closed at $16.94 on July 31 after making a 52-week high of $17.75 on July 29 and then selling off on the interim results. Confirm live price, volume, momentum, and volatility before acting.
| Level | Value | Why it matters |
|---|---|---|
| Current price | $16.94 | Latest reported PSO close for July 31, 2026. The prior close was $17.41 and the day range was $16.59 to $17.19. |
| Near support | $15.92 | The reported 50-day moving average is the first trend review area. It is not a guaranteed price floor. |
| Deeper support | $14.18 | The reported 200-day moving average is a longer trend reference. A sustained break would weaken the current price setup. |
| Near resistance | $17.75 | This was the 52-week high reached intraday on July 29, 2026. A renewed break needs volume and fresh fundamental support. |
| 50-day moving average | $15.92 | Price closed above this average in the July 31 snapshot. |
| 200-day moving average | $14.18 | Price closed above this longer-term average in the July 31 snapshot. |
| Momentum | RSI 55.69 | The reading cooled from the overbought zone above 75 seen in early July. RSI alone does not identify a reversal date. |
| Volume | 840,312 shares average over 20 days | The July 14 move to $17.61 came on 3.0 million shares, while the July 31 close of $16.94 traded about 1.3 million shares. |
| Volatility | 52-week range $12.02 to $17.75 | The range shows that position size and event risk matter even though the vendor beta reading is close to zero. |
| Invalidation | Sustained close below $14.18 | A confirmed loss of the 200-day average should prompt a new review of price action, guidance, cash flow, and the investment thesis. |
PSO AI trading strategy
The PSO AI trading strategy is a rules framework, not personalized advice. Pair price levels with current filings, position limits, a defined loss limit, and an exit condition that fits the chosen time horizon.
Track whether PSO holds above the 50-day average near $15.92 and the 200-day average near $14.18. A move above the $17.75 52-week high has more credibility when volume expands and Pearson confirms its 2026 growth and margin outlook at the 22 October 2026 trading update.
A failed breakout or a sustained close below the selected support level invalidates the setup. Do not treat a moving average as a guaranteed floor.
If PSO pulls back toward $15.92 or $14.18, compare the price with Virtual Learning enrolments, PTE volumes, assessment bookings, higher education digital subscriptions, adjusted operating profit, and free cash flow.
A lower price is not a thesis. Avoid adding until the business data stops deteriorating and the valuation offers a clear margin of safety.
Review Pearson's next trading update on 22 October 2026, business-unit growth, PTE migration policy exposure, assessment contract renewals, net debt, foreign exchange, and signs that AI is reducing content value. Use a position size that can absorb a move toward the bearish range.
The strategy fails when price breaks the selected invalidation level or when the fundamental thesis changes. Reassess before using a new entry level.
Investment research summary
Pearson helps institutions, employers, and learners create content, learn online, test skills, and earn qualifications. H1 2026 sales were £803 million in Assessment and Qualifications, £350 million in Higher Education, £280 million in Virtual Learning, £180 million in Enterprise Learning and Skills, and £166 million in English Language Learning.
The strongest defenses are trust in assessments, recognized qualifications, institutional contracts, content libraries, and the cost of changing courseware or testing systems. Network effects are limited. A cheaper test provider, open content, or a better AI tutor could narrow the advantage, and the New Jersey assessment loss shows contracts are not permanent.
The thesis can fail through tighter migration policy reducing PTE volumes, more lost assessment contracts, weak platform integration, AI driven price pressure, higher net debt, or currency costs. The stock selling off after a headline beat in July is a reminder that the market can already be pricing the good news.
Omar Abbosh became CEO in early 2024 after leading Microsoft's industry solutions work. Pearson completed a £350 million buyback at an average 998 pence, raised the interim dividend 5% to 8.2 pence, and added strategic partners including Salesforce, Adobe, and a leading AI lab. The trade-off is that net debt rose to £1.3 billion while cash was returned.
Workforce reskilling, digital learning, international English testing, and AI assisted education support a long demand runway, and the same technology can lower content costs and make assessment quality more important. H1 2026 growth was uneven: Virtual Learning up 19%, Enterprise up 7%, Higher Education up 2%, Assessment and Qualifications up 2%, and English Language Learning down 3%.
The $16.94 quote implies about 24x trailing EPS and about 10x trailing free cash flow using vendor inputs, while the two-analyst consensus target is $15.70. The exact three-year model gives a base value of $18.10. The price can work if growth and margins improve, but it does not provide a wide margin of safety on the stated base assumptions.
Source-backed data
Every metric below includes a source and last verification date.
| Metric | Value | Source | Last verified |
|---|---|---|---|
| Latest PSO quote | $16.94 last reported close on July 31, 2026; previous close $17.41; day range $16.59 to $17.19 | StockAnalysis.com and StockTitan market data | August 3, 2026 |
| Market capitalization | $10.17 billion vendor snapshot, cross-validated at $10.18 billion from $16.94 times the 601.14 million SEC-filed voting shares, a 0.13% difference | StockAnalysis.com, StockTitan, SEC Form 6-K, financial_rigor.py | August 3, 2026 |
| Shares outstanding | 601,140,494 voting shares per the July 1, 2026 SEC Form 6-K. StockAnalysis.com statistics still show 616.30 million shares, a vendor lag the refresh flags. | Pearson SEC Form 6-K and StockAnalysis.com statistics | August 3, 2026 |
| H1 2026 revenue | £1,779 million, up 4% on an underlying basis and 3% headline (H1 2025: £1,722 million) | Pearson Interim Results for the six months to 30 June 2026 | August 3, 2026 |
| H1 2026 adjusted operating profit | £276 million, up 14% underlying and headline, with a 15.5% margin, 140 bps higher than H1 2025 | Pearson Interim Results for the six months to 30 June 2026 | August 3, 2026 |
| H1 2026 earnings per share | Adjusted EPS 28.9 pence, up 18% headline and 19% at constant exchange rates; statutory basic EPS 24.0 pence | Pearson Interim Results for the six months to 30 June 2026 | August 3, 2026 |
| H1 2026 free cash flow | £259 million, up £103 million from H1 2025, with net cash from operations of £427 million | Pearson Interim Results for the six months to 30 June 2026 | August 3, 2026 |
| 2026 outlook | Mid-single digit underlying revenue growth, £640 million to £685 million of adjusted operating profit at 2025 FX rates (£:$ 1.35), and 90% to 100% free cash flow conversion | Pearson Interim Results for the six months to 30 June 2026 | August 3, 2026 |
| H1 2026 segment sales | Assessment and Qualifications £803m (+2% underlying); Virtual Learning £280m (+19%); Higher Education £350m (+2%); English Language Learning £166m (-3%); Enterprise Learning and Skills £180m (+7%) | Pearson Interim Results for the six months to 30 June 2026 | August 3, 2026 |
| Net debt | £1,343 million at June 30, 2026, up from £1,069 million at the end of 2025 and £1.0 billion a year earlier | Pearson Interim Results for the six months to 30 June 2026 | August 3, 2026 |
| Technical snapshot | 50-day average $15.92; 200-day average $14.18; RSI 55.69; 20-day average volume 840,312; 52-week range $12.02 to $17.75 | StockAnalysis.com statistics and price history | August 3, 2026 |
| Valuation arithmetic | 24.03x PE; 2.28x PB; 9.86x price to free cash flow; 10.14% free cash flow yield; 2.02% dividend yield; recomputed PE 24.06x and P/FCF 10.14x from the close and SEC share count | StockAnalysis.com vendor inputs and financial_rigor.py | August 3, 2026 |
| Analyst consensus | Sell consensus from 2 analysts with an average price target of $15.70 (low $14, high $17.40); BofA raised its target to $17 on July 13, 2026, Morgan Stanley raised to £13.35, and JPMorgan moved to Neutral at £14.20 | StockAnalysis.com forecast page and TheFly/TipRanks news | August 3, 2026 |
This page is an informational research tool, not investment advice. Forecasts are scenario ranges based on available data and explicit assumptions. They can be wrong. Prices, financial statements, technical indicators, analyst views, and company guidance can change after the August 3, 2026 cutoff. Verify current information and consider a qualified adviser before making an investment decision.
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