What Happened?
Shares of educational publishing and media company Scholastic (NASDAQ: SCHL) jumped 6.5% in the morning session after the company launched a new, free-to-stream TV service, ScholasticTV, in partnership with Future Today.
The move appeared to spark investor optimism, helping the stock recover from a steep drop during the previous trading session. The new streaming app featured over 400 hours of programming at its start, including well-known shows like CLIFFORD THE BIG RED DOG and THE MAGIC SCHOOL BUS, targeting children and families. This positive development followed a nearly 12% plunge in the stock after the company reported a fiscal first-quarter loss and a 5% decline in revenue, which fell short of analyst expectations. The previous revenue dip was tied to its Education Solutions segment, which saw sales fall due to uncertainty in school district funding.
Is now the time to buy Scholastic? Access our full analysis report here, it’s free.
What Is The Market Telling Us
Scholastic’s shares are very volatile and have had 21 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 3 days ago when the stock dropped 11.3% on the news that the company reported weak third-quarter results that missed Wall Street's expectations for both revenue and earnings. The children's publisher announced revenue of $225.6 million, a decline of 4.9% year on year and a miss on analyst estimates. Its adjusted loss per share also widened to $2.52, which was worse than both the consensus forecast and the loss from the same quarter last year. The company's profitability also deteriorated, with its operating margin contracting and its cash burn increasing significantly compared to the prior year. While Scholastic did beat expectations for adjusted EBITDA and offered full-year guidance slightly ahead of estimates, these positives were overshadowed by the misses on the top and bottom lines. Overall, the softer-than-expected quarter prompted a negative reaction from investors.
Scholastic is up 21.7% since the beginning of the year, but at $25.74 per share, it is still trading 19.7% below its 52-week high of $32.04 from September 2024. Investors who bought $1,000 worth of Scholastic’s shares 5 years ago would now be looking at an investment worth $1,247.
Do you want to know what moves the business you care about? Add them to your StockStory watchlist and every time a stock significantly moves, we provide you with a timely explanation straight to your inbox. It’s free and will only take you a second.
