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Friday, September 22, 2023

Houghton Mifflin Harcourt Company (NASDAQ:HMHC) Stock is Plummeting, Here is Why

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Houghton Mifflin Harcourt Company (HMHC) shares are trading at lower $1.91 and the avg recommendation for the stock is Hold. while the current analyst price target stands at $3.00.

To add more color to this target, the company’s high over the last year is $6.85 and the low is $1.03. Over the last 52 weeks, HMHC is down -65.21% while the S&P 500 is up 9.82%. The catalyst for this interesting swing was the company’s recent earnings report.

A Notable Earnings Report

In the last quarter, HMHC reported a profit of $90.39 million. Houghton Mifflin Harcourt Company also saw revenues increase to $251.22 million. In addition, HMHC has free cash flow of -$213.63 million as of 06-2020. The company’s EBITDA came in at $38.17 million which compares well with its peers.

HMHC booked profit margins of -35.20%, its Return on Equity (ROE) is -105.60%, and its Return on Assets is -18.10%. All told, it is clear that, HMHC needs to be on your watchlist.

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Of course, we must look beyond the financials and question how well those numbers represent the sustainable earnings power of the business. Investors need to know how sustainable this current run. HMHC has a short ratio of 1.27 and outstanding shares of 125.46M.

Company Outlook

HMHC has seen increased volume after this news and investors are putting their support behind the value proposition. Furthermore, 10-day volume stands at 2.51 million and more growth is possible in the weeks ahead. Traders will also note the company’s earnings per share came in at -3.53. Houghton Mifflin Harcourt Company HMHC also noted assets of $2.17 billion at the end of the last quarter. Investors should also keep an eye on sector updates as HMHC has historically followed its peers on positive news.

All told, Houghton Mifflin Harcourt Company HMHC has strung together solid data and demonstrated underlying fundamentals. At its current valuation, HMHC represents an interesting risk/reward case. Traders should stay tuned to see if this recent report will push the stock to test recent resistance levels.

Houghton Mifflin Harcourt Company HMHC is now commanding a market cap of 259.21M and a float of 124.84M. HMHC is increasing its credibility in this sector and that could lead to more upside down the line. Sign-up for continuing coverage on shares of HMHC stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!

Disclosure: we hold no position in HMHC, either long or short, and we have not been compensated for this article.

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