After a decade private, is this new IPO a buy?

McGraw Hill (NYSE:MH) is known mostly as a publisher of hard cover educational textbooks, but these days it is their digital content that is driving revenue.

The publishing company just posted solid fiscal second quarter results and raised its fiscal year guidance, which drove the stock some 21% higher on Wednesday.

• Revenue: $669.2M, down 2.8% year-over-year, but better than estimates of $662M.
• Net income: $105.3M, down 21% year-over-year.
• Earnings: 57 cents per share, down 29% year over year.

Adjusted earnings: $1.40 per share, down 11% year over year but better than estimates of 99 cents per share.

McGraw Hill’s return to public markets after a 10-year absence has been slow going. The educational publishing company went private in 2013, and its financial arm, McGraw Hill Financial (MFHI) which became S&P Global (SPGI) in 2016, remained public, although under new tickers.

McGraw Hill, the publishing company, returned in July of 2025, debuting at $17 per share. It had dropped down to below $11 per share before Wednesday’s 21% gain. It is now trading at around $13.80 per share, down 18% since its IPO.

Digital and recurring revenue surge

The second quarter results marked the first for McGraw Hill in this latest iteration. While revenue and earnings were down year-over-year, the performance was better than expected.

The strength came from its digital revenue and recurring subscription revenue, which overlap.

McGraw Hill is moving away from its print, hard copy textbook sales, which have long been its bread-and-butter. It has seen a great deal of growth with digital textbooks and learning materials, the bulk of which is recurring revenue from subscriptions and multi-year contracts with clients for this digital content.

So, digital revenue was up 7.7% in Q2 to $352.2 million, while print revenue was down 12% to $317 million. Recurring revenue, which is mostly digital subscriptions, rose 6.5% to $422.4 million. The area that saw the biggest gain in recurring revenue was higher education, which rose 14% to $162 million. McGraw Hill was able to grow its market share in this segment.

“With market share gains and the expansion of AI-powered tools, we are advancing personalized learning at scale while investing in growth beyond our core offerings,” Simon Allen, McGraw Hill chairman, president and CEO, said. “Our fiscal second quarter performance highlights how McGraw Hill successfully empowered educators and learners during the back-to-school season with innovative and efficacious solutions.”

McGraw Hill raises its guidance

Further, the remaining performance obligation (RPO), which is contracts in the pipeline, was $1.91 billion, up from $1.67 billion six months ago.

The strength of digital sales and strong RPO pipeline led McGraw Hill to boost its revenue and earnings guidance for the full fiscal year, which ends March 31, 2026. It is now calling for:

• Revenue of $2.031B to $2.061B, up from $1,986B to $2.046B.
• Recurring revenue of $1,504B to $1.524B, up from $1.477B to $1.517B.
• Adjusted EBITDA of $702M to $722M, up from $663M to $703M.

McGraw Hill is ramping up its innovation, launching new AI tools to improve learning outcomes more efficiently. One thing to watch is its debt, which is relatively high, with a high debt to equity ratio and a low current ratio, which suggests low liquidity.

Much of that comes from being saddled with debt from the leveraged buyouts involving two past private equity owners. The company has been working to pay it down and has some good business in the pipeline. It remains a major player in the space and is strategically focused on growing its higher margin digital business.

Analysts are certainly bullish on it with a median price target of $19.50, which suggests 41% upside. Even with Wednesday’s rally, the stock is still cheap. The new McGraw Hill just might be one to put on your radar.