Scholastic (SCHL) | News Based Sentiment Analysis

• On September 18, 2025, Scholastic reported its quarterly earnings, missing analyst expectations with earnings per share of ($2.52) compared to the estimated ($2.44), and revenue of $225.60 million falling short of the $240.41 million estimate. This earnings miss, while slight, highlights potential challenges in revenue generation.
• Despite the earnings miss, investor sentiment showed signs of improvement early in the month, as Scholastic's stock price moved above its 200-day moving average of $21.22 on October 1, 2025, closing at $27.41 with a trading volume of 280,660 shares. This suggests a shift in market perception, potentially driven by future expectations.
• Scholastic shares reached a new 52-week high of $28.75 on October 2, 2025, closing at $28.60 with a trading volume of 29,200 shares, marking a 4.9% increase over the past two weeks. This positive price action, coupled with a daily gain of 1.94% on October 2nd, indicates strong bullish momentum.
• A Manhattan federal judge ruled on October 2, 2025, that a Travelers unit must cover Scholastic for costs related to a trademark and copyright infringement lawsuit, though consequential damages were excluded. This ruling reduces potential financial burdens associated with the legal dispute, offering some financial relief.
• Looking ahead, Scholastic announced on October 3, 2025, that the consensus revenue guidance for Fiscal Year 2026 is between $1.66 billion and $1.69 billion, with anticipated earnings per share of 0.84. This provides a benchmark for investors to assess future performance against.
• The company is strategically shifting its digital engagement platforms, announcing on November 4, 2025, the discontinuation of the Home Base app and website, with all user data permanently deleted shortly after. This represents a streamlining of digital resources and a focus on other areas.
• Institutional investors continue to hold a significant stake in Scholastic, collectively owning 82.57% of the stock as of October 1, 2025, with firms like Signaturefd LLC and GAMMA Investing LLC increasing their positions substantially in the first and second quarters of 2025. This strong institutional backing provides stability and confidence in the company's long-term prospects.
• Milena Alberti-Perez resigned from the Scholastic Corp. board on October 3, 2025, to pursue opportunities in the media sector, signaling a change in board composition.

The Investment Story: October 2025 presented a mixed bag for Scholastic, with an earnings miss offset by positive stock performance, legal wins, and strategic shifts in digital platforms. The company is navigating challenges while maintaining strong institutional support and setting expectations for FY26.

What It Means for Investors: The earnings miss is a short-term concern, but the positive stock momentum and reduced legal liabilities are encouraging. Investors should monitor the company's progress towards its FY26 revenue and earnings guidance, as well as the impact of the Home Base app discontinuation.

Looking Ahead: Investors should watch for updates on the implementation of the FY26 strategy, the impact of the digital platform changes, and any further developments in the legal case. The dividend payment on December 15, 2025, to stockholders of record on October 31, 2025, will also be a key date.

The Bottom Line: Scholastic is a company in transition, balancing short-term challenges with long-term strategic initiatives. While the earnings miss is a setback, the positive market response and strong institutional backing suggest potential for future growth, making it a cautiously optimistic investment.