McGraw Hill, Inc. (MH) Stock Analysis

McGraw Hill’s primary competitive advantages stem from its scale, digital transformation, and entrenched customer relationships. The company serves approximately 60 million learners and educators annually, a reach that few rivals can match. Its digital revenue now accounts for 61% of total revenue and 82% in higher education, outpacing traditional competitors like Pearson and Cengage, who have struggled to transition legacy print businesses as quickly.

Recurring revenue is a key strength: 69% of McGraw Hill’s revenue is recurring, providing visibility and stability. This is underpinned by multi-year contracts in K-12 and annual subscriptions in higher education and professional segments, creating high switching costs for institutions. Gross margins are robust at 77–80%, reflecting the profitability of digital offerings and operational leverage.

McGraw Hill’s proprietary content, data assets, and AI-driven personalized learning tools further differentiate it. The company’s investment in machine learning and generative AI has enabled adaptive products such as ALEKS and Connect, which are difficult for smaller or less tech-focused rivals to replicate. While competitors like HMH and Savvas are also investing in digital, McGraw Hill’s scale and data “moat” provide a defensible edge.

Risks include potential disruption from generative AI, which could lower barriers to content creation, and budget pressures in education. However, McGraw Hill’s institutional focus, long-standing relationships, and ongoing innovation position it well relative to peers.