PowerSchool Holdings, Inc. (PWSC) | Investment Case

1. Company Snapshot

1.a. Company Description

PowerSchool Holdings, Inc.provides cloud-based software to the K-12 education market.Its solution is embedded in school workflows and is used on daily basis by educators, students, administrators, and parents in schools and districts representing approximately 45 million students worldwide.

Its cloud-based technology platform helps schools and districts manage state reporting and related compliance, special education, finance, human resource, talent, registration, attendance, funding, learning, instruction, grading, college and career readiness, assessments, and analytics.The company serves state departments of education, public school districts, charter schools, independent schools, virtual schools, and others.PowerSchool Holdings, Inc.

was founded in 1997 and is headquartered in Folsom, California.PowerSchool Holdings, Inc.was a former subsidiary of Pearson Education Limited.

Show Full description

1.b. Last Insights on PWSC

Key drivers behind PowerSchool Holdings, Inc.'s recent developments include the proposed buyout by Bain Capital at $22.80 per share, which is being investigated by law firms such as Kaskela Law LLC and Bleichmar Fonti & Auld LLP to determine if the price is fair to investors. The company's Q2 earnings release showed a miss on both top- and bottom-line numbers, with earnings of $0.23 per share, compared to the consensus estimate of $0.24 per share.

1.c. Company Highlights

Last Price	22.81
Change Percentage	-0.18%
Open	22.81
Previous Close	22.85
Market Cap ( Millions)	3802
Volume	25712301
Year High	25.16
Year Low	16.15
M A 50	22.67
M A 200	21.91

FCF Yield	3.41%
Dividend Yield	0.00%
ROE	-2.44%
Debt / Equity	64.47%
Net Debt / EBIDTA	494.95%
Price To Book	2.86
Price Earnings Ratio	-119.38
Price To FCF	29.32
Price To sales	5.45
EV / EBITDA	28.5

2. Transcript Summary

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3. NewsRoom

PowerSchool Named Snowflake Public Sector Data Cloud Product Partner of the Year

Jun -03

Source: businesswire.com

PowerSchool Launches Power of Impact Awards to Celebrate Teacher Appreciation Week

Apr -17

Source: businesswire.com

PowerSchool Introduces New Family-Facing AI Assistant

Apr -01

Source: businesswire.com

PowerSchool Notice of Data Breach

Feb -03

Source: businesswire.com

PowerSchool Notice of Data Breach

Jan -29

Source: businesswire.com

PowerSchool Data Breach Exposes Personal Information: Murphy Law Firm Investigates Legal Claims

Jan -28

Source: globenewswire.com

PowerSchool Data Breach Under Investigation by Levi & Korsinsky, LLP

Jan -24

Source: accessnewswire.com

Levi & Korsinsky, LLP Investigates PowerSchool Data Breach

Jan -23

Source: accessnewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (11.22%)

6. Segments

Software-as-a-Service

Expected Growth: 12%

PowerSchool Holdings, Inc.'s 12% growth in Software-as-a-Service is driven by increasing adoption of cloud-based education technology, rising demand for data-driven instruction, and growing need for efficient student information systems. Additionally, the company's expanding customer base, strategic acquisitions, and continuous product innovation also contribute to its rapid growth.

Software Maintenance

Expected Growth: 10%

PowerSchool Holdings, Inc.'s 10% growth in Software Maintenance is driven by increasing adoption of cloud-based education technology, rising demand for digital learning platforms, and strategic partnerships with educational institutions. Additionally, the company's focus on innovation, customer satisfaction, and retention has led to a loyal customer base, resulting in consistent revenue growth.

Professional Services

Expected Growth: 9%

PowerSchool Holdings, Inc.'s 9% growth in Professional Services is driven by increasing demand for education technology, strategic partnerships, and expansion into new markets. The company's focus on providing comprehensive solutions for K-12 education, including student information systems, learning management, and assessment analytics, has led to increased adoption and retention rates among educators and administrators.

License and Other

Expected Growth: 8%

PowerSchool Holdings, Inc.'s 8% growth in License and Other segment is driven by increasing adoption of its unified platform, expansion into new markets, and strategic partnerships. Additionally, the company's focus on innovation, customer satisfaction, and retention has led to higher renewal rates and upselling opportunities, contributing to the segment's growth.

7. Detailed Products

Unified Classroom

A comprehensive platform that integrates the functionality of a learning management system, student information system, and special education management system.

PowerTeacher

A gradebook and lesson planning tool that helps teachers manage their instructional workflow.

PowerSchool SIS

A student information system that helps schools manage student data, including demographics, attendance, and grades.

Schoology

A learning management system that helps teachers create and manage assignments, discussions, and assessments.

Naviance

A college and career readiness platform that helps students explore career options and plan for college.

Unified Talent

A talent management system that helps schools manage teacher recruitment, hiring, and professional development.

Ecollect

A fee management system that helps schools manage student fees and payments.

8. PowerSchool Holdings, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

PowerSchool Holdings, Inc. operates in a niche market, providing K-12 education technology solutions. While there are some substitutes available, they are not highly attractive, and the company's strong brand recognition and customer loyalty mitigate the threat of substitutes.

Bargaining Power Of Customers

PowerSchool Holdings, Inc.'s customers are primarily school districts and educational institutions, which have limited bargaining power due to the company's dominant market position and the complexity of its products.

Bargaining Power Of Suppliers

PowerSchool Holdings, Inc. has a diversified supplier base, and its suppliers have limited bargaining power due to the company's large scale and negotiating power.

Threat Of New Entrants

The education technology market has high barriers to entry, including significant capital requirements, regulatory hurdles, and the need for specialized expertise, making it difficult for new entrants to compete with PowerSchool Holdings, Inc.

Intensity Of Rivalry

The education technology market is moderately competitive, with a few established players, including PowerSchool Holdings, Inc. While there is some rivalry, the company's strong market position and brand recognition help to mitigate the intensity of rivalry.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	38.82%
Debt Cost	8.06%
Equity Weight	61.18%
Equity Cost	8.81%
WACC	8.52%
Leverage	63.44%

11. Quality Control: PowerSchool Holdings, Inc. passed 4 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Sprinklr

A-Score: 5.1/10

Value: 3.5

Growth: 8.8

Quality: 8.0

Yield: 0.0

Momentum: 6.0

Volatility: 4.7

1-Year Total Return ->

CleanSpark

A-Score: 4.5/10

Value: 5.6

Growth: 4.4

Quality: 9.0

Yield: 0.0

Momentum: 7.0

Volatility: 1.0

1-Year Total Return ->

Dayforce

A-Score: 4.3/10

Value: 2.8

Growth: 7.3

Quality: 4.7

Yield: 0.0

Momentum: 6.0

Volatility: 4.7

1-Year Total Return ->

PowerSchool

A-Score: 3.9/10

Value: 4.6

Growth: 7.4

Quality: 3.7

Yield: 0.0

Momentum: 5.0

Volatility: 2.7

1-Year Total Return ->

Envestnet

A-Score: 3.7/10

Value: 3.7

Growth: 3.6

Quality: 3.9

Yield: 0.0

Momentum: 5.0

Volatility: 6.3

1-Year Total Return ->

nCino

A-Score: 3.4/10

Value: 3.0

Growth: 7.4

Quality: 4.0

Yield: 0.0

Momentum: 1.5

Volatility: 4.7

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

14.35%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

8.52%

PowerSchool Holdings, Inc. - US73939C1062

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on PWSC

1.c. Company Highlights

Average Growth

Average Quality

Fairly Valued

Earnings Miss

Lower Quality

Medium Volatility

Revenues Miss

Higher Growth

Less Volatile

Strong Momentum

Average Yield

Stable Momentum

2. Transcript Summary

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (11.22%)

6. Segments

Software-as-a-Service

Expected Growth: 12%

Software Maintenance

Expected Growth: 10%

Professional Services

Expected Growth: 9%

License and Other

Expected Growth: 8%

7. Detailed Products

Unified Classroom

PowerTeacher

PowerSchool SIS

Schoology

Naviance

Unified Talent

Ecollect

8. PowerSchool Holdings, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: PowerSchool Holdings, Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

22.81$

Current Price

22.81$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA