April 5, 2019

JW.A – Market expectations are for compressing Uniform ROA, and management is concerned about publishing agreements, revenue, partnerships, and services

  • John Wiley & Sons, Inc. (JW.A:USA) currently trades near recent lows relative to UAFRS-based (Uniform) Earnings, with a 13.4x Uniform P/E. At these levels, the market has bearish expectations for the firm, and management is concerned about their Projekt DEAL publishing agreement, publishing segment revenue declines, university partnerships, and their degree program and subscription services
  • Specifically, management may be exaggerating the benefits of their Projekt DEAL publishing agreement, the potential of the Open Access journal, and their global leadership position. Additionally, they may be overstating the importance of publishers in the research ecosystem, and may be concerned about publishing segment revenue declines and the progress of their Learning House integration. Furthermore, they may be concerned about the quality of their degree program resources, their Inclusive Access university partnerships, and their ability to address disruptions in their education and professional books business. Finally, management may be overstating the strength of the German university structure, the potential of their Test Prep business, and the value of their subscription access service
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