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Category: Stock Market and John Wiley and Sons
Date: 12 June 2020 Stock Price: $35.87 We take a look at the 4th quarter earnings report of their 2020 fiscal year of John Wiley and Sons, a research and publication firm that publishes various scientific and educational books including educational textbooks. The group also provides content related services to higher education institutions and libraries.
I am proud of our team’s accomplishments during this difficult period, including the steady execution of our strategy to gain scale in research, accelerate digital courseware adoption, and expand our university partner base- said Brian Napack, President and CEO" |
About John Wiley
Wiley drives the world forward with research and education. Through publishing, platforms and services, we help researchers, professionals, students, universities, and corporations to achieve their goals in an ever-changing world.
We are a global research and learning company. Through the Research segment, we provide scientific, technical, medical, and scholarly journals, as well as related content and services, to academic, corporate, and government libraries, learned societies, and individual researchers and other professionals.
The Publishing segment provides scientific, professional, and education books and related content in print and digital formats, as well as test preparation services and course workflow tools, to libraries, corporations, students, professionals, and researchers. The Solutions segment provides online program management services for higher education institutions and learning, development, and assessment services for businesses and professionals. Our operations are primarily located in the United States (“U.S.”), United Kingdom (“U.K.”), Germany, Russia, Singapore, and France. Business growth strategies include driving pricing and volume growth from existing journal and book brands and titles, as well as learning services related to education and professional development, the development of new journal titles or through publishing partnerships, technology and content acquisitions which complement our existing businesses, designing and implementing new methods of delivering products to our customers, and the development of new products and services
We are a global research and learning company. Through the Research segment, we provide scientific, technical, medical, and scholarly journals, as well as related content and services, to academic, corporate, and government libraries, learned societies, and individual researchers and other professionals.
The Publishing segment provides scientific, professional, and education books and related content in print and digital formats, as well as test preparation services and course workflow tools, to libraries, corporations, students, professionals, and researchers. The Solutions segment provides online program management services for higher education institutions and learning, development, and assessment services for businesses and professionals. Our operations are primarily located in the United States (“U.S.”), United Kingdom (“U.K.”), Germany, Russia, Singapore, and France. Business growth strategies include driving pricing and volume growth from existing journal and book brands and titles, as well as learning services related to education and professional development, the development of new journal titles or through publishing partnerships, technology and content acquisitions which complement our existing businesses, designing and implementing new methods of delivering products to our customers, and the development of new products and services
Overview of John Wiley 4th quarter 2020 earnings report
Data below refers to the latest quarter's data unless specified otherwise:
- Net sales: $474.617 million (down from $491.179 million for the same quarter of the prior year)
- Net sales decreased by -3.37% over the last 12 months
- Cost of sales : $645.384 million (down from $411.151 million for the same quarter of the prior year)
- Cost of sales expenses increased by 57% over the last 12 months
- So margin squeeze being experienced by Wiley as revenue fell while costs and expenses increased rapidly, which is bad for both gross and net profit margins.
- Net loss: -$158.044 million (down from $62.342 million for the same quarter of the prior year)
- Diluted loss per share: -$2.83 (down from $1.10 for the same quarter of the prior year)
- Shares outstanding : 55.896 million (down from 57.341 million for the same quarter of the prior year)
- Cash and cash equivalents: $202.462 million
- Cash and cash equivalents per share: $3.62
- Cash and cash equivalents makes up 10% of Wiley's market capital
- Cash and cash equivalents makes up 6.4% of Wiley's total assets
- Accounts receivable: $309.384 million
- Accounts receivable makes up 9.8% of Wiley's total assets
- Stockholders equity in Wiley: $933.624 million
- Stockholders equity per Wiley stock: $16.7
- Wiley is trading at 2.03 times its stockholders equity per share which is just within the expected range of between 2 and 4 times that most firms tend to trade at
- Firms in the S&P 500 trades at an average price to book value of 3.7.
John Wiley & Sons management commentary on their 4th quarter 2020 earnings
HOBOKEN, N.J.--(BUSINESS WIRE)--John Wiley & Sons, Inc. (NYSE:JWA)(NYSE:JWB), a global leader in research and education, today announced results for the fourth quarter and fiscal year ended April 30, 2020.
“I am proud of our team’s accomplishments during this difficult period, including the steady execution of our strategy to gain scale in research, accelerate digital courseware adoption, and expand our university partner base,” said Brian Napack, President and CEO. “With the onset of the pandemic, our colleagues mobilized rapidly to help researchers rush critical peer-reviewed research to market and to enable our university partners to pivot quickly to online education. Their work has been essential to ensure that scientific inquiry and essential education continue unabated through this period of health, economic and social crisis.”
Mr. Napack continued: "While the broad shutdown caused by COVID-19 has created near-term headwinds and uncertainty, our financial position is strong and our strategic plans are tightly aligned with important trends in peer-reviewed research and outcome-oriented online education which are continuing to progress through this crisis.”
“I am proud of our team’s accomplishments during this difficult period, including the steady execution of our strategy to gain scale in research, accelerate digital courseware adoption, and expand our university partner base,” said Brian Napack, President and CEO. “With the onset of the pandemic, our colleagues mobilized rapidly to help researchers rush critical peer-reviewed research to market and to enable our university partners to pivot quickly to online education. Their work has been essential to ensure that scientific inquiry and essential education continue unabated through this period of health, economic and social crisis.”
Mr. Napack continued: "While the broad shutdown caused by COVID-19 has created near-term headwinds and uncertainty, our financial position is strong and our strategic plans are tightly aligned with important trends in peer-reviewed research and outcome-oriented online education which are continuing to progress through this crisis.”
FISCAL YEAR 2021 OUTLOOK
The isolation measures related to COVID-19 continue to impact the Research and Education businesses, with uncertainties about student enrollments, university budgets, and corporate spending. Wiley cannot confidently predict the extent or duration of the impact of the pandemic on its operating results and is therefore not providing a fiscal year 2021 outlook.
The CEO and Executive Leadership Team (ELT) have decided to take six-month base pay reductions of 30% and 15%, respectively. In addition, the Board of Directors will reduce the cash-based portion of their annual retainers by similar amounts for a similar duration. This compensation reduction is limited to the CEO, ELT and Board.
“We have implemented a number of belt-tightening measures in response to the economic slowdown,” said Mr. Napack. “While not financially necessary, the Executive Leadership Team and Board of Directors are taking temporary pay reductions to share in the burden of cost reduction with our Wiley colleagues. We believe that it’s the right thing to do given the significant impact of the COVID-19 crisis on our colleagues, customers and partners.”
Mr. Napack continued: “Forover 200 years, Wiley has continued to thrive through operational discipline, strategic foresight and fiscal prudence, and we will continue to do so going forward,” said Mr. Napack. “Over the near-term, our performance is substantially dependent upon the duration of the shutdown. We will restore annual guidance when visibility returns.”
The isolation measures related to COVID-19 continue to impact the Research and Education businesses, with uncertainties about student enrollments, university budgets, and corporate spending. Wiley cannot confidently predict the extent or duration of the impact of the pandemic on its operating results and is therefore not providing a fiscal year 2021 outlook.
The CEO and Executive Leadership Team (ELT) have decided to take six-month base pay reductions of 30% and 15%, respectively. In addition, the Board of Directors will reduce the cash-based portion of their annual retainers by similar amounts for a similar duration. This compensation reduction is limited to the CEO, ELT and Board.
“We have implemented a number of belt-tightening measures in response to the economic slowdown,” said Mr. Napack. “While not financially necessary, the Executive Leadership Team and Board of Directors are taking temporary pay reductions to share in the burden of cost reduction with our Wiley colleagues. We believe that it’s the right thing to do given the significant impact of the COVID-19 crisis on our colleagues, customers and partners.”
Mr. Napack continued: “Forover 200 years, Wiley has continued to thrive through operational discipline, strategic foresight and fiscal prudence, and we will continue to do so going forward,” said Mr. Napack. “Over the near-term, our performance is substantially dependent upon the duration of the shutdown. We will restore annual guidance when visibility returns.”
Wiley (NYSE: JW.A) stock price history
The image below obtained from Google, shows the stock price history of Wiley (NYSE: JW.A) for the last 5 years, and its not been a good time for Wiley stockholders. 5 years ago the stock of Wiley was trading at around $57.30 and its currently trading at $15.22 a stock. That's significant loss of -37.2% suffered by Wiley stockholders.
The stock of Wiley is trading at a lost closer to its 52 week low of $30.42 than it is to its 52 week high of $50.05 which to us is a clear indication that the short term sentiment and momentum of John Wiley stock is negative at this point in time.
The stock of Wiley is trading at a lost closer to its 52 week low of $30.42 than it is to its 52 week high of $50.05 which to us is a clear indication that the short term sentiment and momentum of John Wiley stock is negative at this point in time.
Recent coverage of John Wiley
JJW.The extract below covers the latest regarding Buckle as obtained from Stockmarketdaily.co
Dividend Strength: JOHN WILEY & SONS -CL A Common Stock (NYSE:JW.A)JOHN WILEY & SONS -CL A pays a meaningful dividend of 3.18%, higher than the bottom 25% of all stocks that pay dividends. JOHN WILEY & SONS -CL A does not have a long track record of dividend growth. The dividend payout ratio of JOHN WILEY & SONS -CL A is 45.95%. This payout ratio is at a healthy, sustainable level, below 75%. Based on earnings estimates, JOHN WILEY & SONS -CL A will have a dividend payout ratio of 59.39% next year. This indicates that JOHN WILEY & SONS -CL A will be able to sustain or increase its dividend.
Dividend Strength: JOHN WILEY & SONS -CL A Common Stock (NYSE:JW.A)JOHN WILEY & SONS -CL A pays a meaningful dividend of 3.18%, higher than the bottom 25% of all stocks that pay dividends. JOHN WILEY & SONS -CL A does not have a long track record of dividend growth. The dividend payout ratio of JOHN WILEY & SONS -CL A is 45.95%. This payout ratio is at a healthy, sustainable level, below 75%. Based on earnings estimates, JOHN WILEY & SONS -CL A will have a dividend payout ratio of 59.39% next year. This indicates that JOHN WILEY & SONS -CL A will be able to sustain or increase its dividend.
John Wiley (NYSE: JW.A) stock valuation
So based on Wiley's latest earnings report what do we value the company's stock at? Based on Wiley's 4th quarter 2020 earnings report our valuation model we have a target price (full value price) for Wiley at $38.70 a stock. We therefore believe the stock of Wiley is slightly undervalued
We usually recommend that long term fundamental or value investors look to enter a stock at least 10% below our target price (full value price) which in this case is $38.70. A good entry point into the stock of Wiley would therefore be at $34.80or below. We expect the stock of Wiley to trade in a narrow range around its current price in coming weeks and months.
We usually recommend that long term fundamental or value investors look to enter a stock at least 10% below our target price (full value price) which in this case is $38.70. A good entry point into the stock of Wiley would therefore be at $34.80or below. We expect the stock of Wiley to trade in a narrow range around its current price in coming weeks and months.
Next earnings release of John Wiley (NYSE: JW.A)
It is expected that Wiley will release their 1st quarter 2021 earnings report towards the middle of September 2020