Why Wiley Shares Are Down 8% Today

The publishing house John Wiley & Sons (WLY -8.88%) (JW.B -10.87%) was down 8.4% by 10:40 a.m. ET Thursday after reporting mixed earnings in its fiscal Q1 2025 report this morning.

Analysts expect the research and education publisher to earn $0.55 per share (adjusted for one-time items) on $387.4 million in Q1. Wiley reported better-than-expected sales of $403.8 million, but earnings were weaker than expected — just $0.47.

John Wiley’s First Quarter Earnings

That’s the good news. The bad news is that Wiley’s $0.47 profit was a non-GAAP number. When calculated according to generally accepted accounting principles (GAAP), Wiley actually lost $0.03 per share for the quarter. (This was, however, an improvement over last year’s Q1 loss of $1.67 per share. )

CEO Matthew Kissner said he was “pleased” with this start to fiscal 2025, calling Wiley’s 3% growth in the research publications division “solid” and pointing to Wiley’s use of generative artificial intelligence to drive growth in sales of 14% in academic courses. However, the “professional” side of the company’s learning division was a drag on results, dragging the division down to 1% decline in sales.

In short: Wiley’s smallest division shrank, its largest division grew just 3%, and overall sales fell 10.5%.

Which is not great.

Is Wiley stock a sell?

But it could get better.

Turning to guidance, Wiley forecast total sales growth of about 3% in fiscal 2025, with both divisions growing at least in the low single digits and research potentially growing in the mid-single digits. It predicts adjusted earnings will rise about 23% to $3.42 a share — which is actually more than Wall Street predicted. And free cash flow could rise about 10% to $125 million.

The problem is, if Wiley hits those numbers, the stock is selling for a price-to-free cash flow ratio of nearly 19 (and that’s before factoring in Wiley’s more than $800 million in net debt). For a single digit grower with a lot of debt, it seems too expensive to me.

Wiley shares remain sold.