While the big names on Wall Street get most of the attention, other good stocks fly under the radar and get little recognition — despite strong performances from their underlying companies. One of those stocks is John Wiley & Sons (NYSE:WLY).
Best known for its For Dummies series of books, the publishing company’s stock has soared some 27% so far this year to around $40 per share. The shares jumped some 12% on Thursday after the company delivered solid quarterly earnings.
In fact, some other catalysts could also drive additional growth in the future. Let’s take a look at what is propelling this stock you’ve probably never heard of through the roof.
Reorganizing and streamlining
Late last week, the John Wiley & Sons stock price received a boost from its solid fiscal fourth-quarter earnings results. Those results exceeded analysts’ expectations as the company implements its reorganization plan.
John Wiley & Sons is in the process of divesting three non-core businesses with the goal of streamlining operations and focusing its investments on its core strengths. In January, the company sold its University Services arm, and in May, it closed a deal to sell its Wiley Edge business.
Next year, John Wiley& Sons plans to divest its CrossKnowledge unit. Going forward, there will be two major business lines: Research and Learning.
Research essentially consists of the company’s books and publishing arm, including its For Dummies series. The Leaning segment focuses on academic content and courseware and generative-AI training for large language models.
The publisher’s revenue fell 11% year over year in its fiscal fourth quarter and was off 5% to $1.9 billion for the full fiscal year. The two divestitures resulted in lower overall numbers, but John Wiley & Sons still beat estimates.
However, the divestitures and other streamlining measures allowed the company to cut costs by 10% in the quarter and 7% for the full fiscal year.
GenAI training fueling growth
The Learning business has been fueling Wiley’s revenue growth. In the fourth quarter, Learning revenue climbed 18%, spurred by a $23 million content-rights project for training GenAI large language models.
Interim President and CEO Matthew Kissner sees GenAI training as a key growth engine for the publisher.
“We are seeing robust demand to publish and significant output acceleration in Research as well as continued outperformance in Learning,” Kissner said. “On top of this, we’re seeing significant interest in leveraging our authoritative content to train AI and machine learning models.”
John Wiley & Sons has another GenAI training project with another large tech company lined up for fiscal 2025.
John Wiley & Sons Stock Outlook
In its outlook for fiscal 2025, Wiley sees low- to mid-single-digit revenue growth, resulting in a range of $1.65 billion to $1.69 billion.
With its expense reductions and focused investments and its expanded GenAI content licensing and product development, the publisher expects its adjusted earnings to rise 4% to 9%, resulting in a range of $385 million to $410 million.
Finally, Wiley estimates that its adjusted earnings per share will rise 16% to 29% for the full year, reaching between $3.25 and $3.60 per share. In addition, its free cash flow is expected to rise from $114 million to $125 million.
“We’ve executed on our stated commitments with discipline and speed, enabling us to exceed our earnings guidance and accelerate our cost savings program, setting us up well for continued margin expansion and strong cash generation ahead,” Kissner said.
As you might imagine, Wiley stock doesn’t get much analyst coverage, but its consensus price target is $50 per share, which is 22% higher than its current price.
The stock is also fairly cheap with a P/E ratio of 14. Given its growth outlook, expense management and AI catalyst, this stock should probably be on your radar.
