McGraw Hill’s Digital Transformation Finally Clicks, Shares Rocket 30%

Just a week ago, few investors would have guessed that McGraw Hill (NYSE:MH) — the 137-year-old education publisher once seen as a relic of the textbook era — would become one of the market’s hottest momentum stories. Yet in an astonishing turn, the stock has surged nearly 30% over the past week, driven by a wave of optimism that the company’s long-promised digital transformation is finally delivering results.

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The rally began after McGraw Hill reported far stronger-than-expected fiscal Q2 2026 results, revealing that its higher-education segment grew 14% year-over-year while digital and recurring revenues both climbed at a healthy pace. Digital now represents more than half of total revenue, and recurring subscriptions are quickly becoming the engine of the business. Gross margins expanded to over 79%, and adjusted EBITDA guidance for the full year was raised, signaling that years of investment in AI-driven learning platforms are starting to pay off. Management highlighted that tools like “Scribe” and “AI Reader” are gaining rapid traction among universities and students, positioning McGraw Hill as a serious contender in the fast-evolving world of adaptive learning.

Investor sentiment has shifted almost overnight. Once dismissed as a slow-growth publishing brand, McGraw Hill is now being re-rated as a tech-enabled education platform with improving profitability and subscription visibility. The broader backdrop of rising demand for AI-powered educational tools — from personalized tutoring to automated grading — has only amplified the excitement, as investors hunt for credible beneficiaries of the education-tech boom.

Still, the rally isn’t without risks. McGraw Hill remains exposed to cyclical K-12 spending, which has softened in recent quarters, and its legacy print business continues to shrink. Debt from its private-equity past also looms large, and management’s ability to manage that balance sheet prudently will determine whether the current enthusiasm can turn into long-term value. Valuation has also become a talking point, as shares now trade well above their recent averages, leaving little room for disappointment.

For now, though, the turnaround story is hard to ignore. McGraw Hill’s 30% weekly surge marks not just a price move but a perception shift — from a dusty publisher to a modern digital learning powerhouse. If it can sustain double-digit growth in digital and recurring segments while maintaining margin discipline, the company’s comeback could evolve into one of the most remarkable reinventions in the education industry’s recent history.

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