Citigroup slashes price target on Houghton Mifflin Harcourt Company [HMHC] – find out why.

Houghton Mifflin Harcourt Company [NASDAQ: HMHC] loss -7.40% or -0.83 points to close at $10.38 with a heavy trading volume of 1285213 shares. The company report on June 10, 2021 that Houghton Mifflin Harcourt Announces Results of Asset Sale Offer and Collateral Asset Sale Offer to Purchase Up to $158.0 Million of Senior Secured Notes.

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Learning technology company Houghton Mifflin Harcourt (“HMH” or the “Company”) (Nasdaq: HMHC) announced the results of the cash tender offer (the “Asset Sale Offer”) by its wholly owned subsidiaries, Houghton Mifflin Harcourt Publishers Inc., Houghton Mifflin Harcourt Publishing Company and HMH Publishers LLC, to purchase up to $158.0 million aggregate principal amount (the “Offer Amount”) of their 9.000% Senior Secured Notes due 2025 (the “Notes”), at a purchase price of 100% of the principal amount thereof plus accrued and unpaid interest to, but not including, the purchase date. The Asset Sale Offer expired at 11:59 p.m., New York City time, on June 8, 2021.

According to information provided by Global Bondholder Services Corporation, the Information Agent, as of the expiration of the Asset Sale Offer, $2,726,000 aggregate principal amount of the Notes were validly tendered and not validly withdrawn in the Asset Sale Offer. As the aggregate principal amount of the Notes validly tendered and not validly withdrawn does not exceed the Offer Amount, all validly tendered Notes that were not validly withdrawn have been accepted.

It opened the trading session at $11.054, the shares rose to $11.29 and dropped to $10.0799, the range by which the price of stock traded the whole day. The daily chart for HMHC points out that the company has recorded 185.16% gains over the past six months. However, it is still -615.86% lower than its most recent low trading price.

If we look at the average trading volume of 1.43M shares, HMHC reached to a volume of 1285213 in the most recent trading day, which is why market watchdogs consider the stock to be active.

Here is what top equities market gurus are saying about Houghton Mifflin Harcourt Company [HMHC]:

Based on careful and fact-backed analyses by Wall Street experts, the current consensus on the target price for HMHC shares is $8.08 per share. Analysis on target price and performance of stocks is usually carefully studied by market experts, and the current Wall Street consensus on HMHC stock is a recommendation set at 3.00. This rating represents a strong Buy recommendation, on the scale from 1 to 5, where 5 would mean strong sell, 4 represents Sell, 3 is Hold, and 2 indicates Buy.

Citigroup have made an estimate for Houghton Mifflin Harcourt Company shares, keeping their opinion on the stock as Neutral, with their previous recommendation back on October 05, 2020. While these analysts kept the previous recommendation, BMO Capital Markets dropped their target price from $7 to $3. The new note on the price target was released on April 07, 2020, representing the official price target for Houghton Mifflin Harcourt Company stock. Previously, the target price had yet another drop from $7.50 to $1, while Citigroup kept a Sell rating on HMHC stock.

The Average True Range (ATR) for Houghton Mifflin Harcourt Company is set at 0.47, with the Price to Sales ratio for HMHC stock in the period of the last 12 months amounting to 1.31. The Price to Book ratio for the last quarter was 27.32, with the Price to Cash per share for the same quarter was set at 1.37. Price to Free Cash Flow for HMHC in the course of the last twelve months was 9.15 with Quick ratio for the last quarter at 0.80.

Trading performance analysis for HMHC stock

Houghton Mifflin Harcourt Company [HMHC] fell into the red zone at the end of the last week, falling into a negative trend and dropping by -1.05. With this latest performance, HMHC shares gained by 10.07% in over the last four-week period, additionally plugging by 185.16% over the last 6 months – not to mention a rise of 390.78% in the past year of trading.

Overbought and oversold stocks can be easily traced with the Relative Strength Index (RSI), where an RSI result of over 70 would be overbought, and any rate below 30 would indicate oversold conditions. An RSI rate of 50 would represent a neutral market momentum. The current RSI for HMHC stock in for the last two-week period is set at 58.21, with the RSI for the last a single of trading hit 53.12, and the three-weeks RSI is set at 60.75 for Houghton Mifflin Harcourt Company [HMHC]. The present Moving Average for the last 50 days of trading for this stock 9.02, while it was recorded at 10.86 for the last single week of trading, and 5.18 for the last 200 days.

Houghton Mifflin Harcourt Company [HMHC]: A deeper dive into fundamental analysis

Operating Margin for any stock indicates how profitable investing would be, and Houghton Mifflin Harcourt Company [HMHC] shares currently have an operating margin of -11.49 and a Gross Margin at +35.07. Houghton Mifflin Harcourt Company’s Net Margin is presently recorded at -46.53.

Return on Total Capital for HMHC is now -10.57, given the latest momentum, and Return on Invested Capital for the company is -43.89. Return on Equity for this stock declined to -146.11, with Return on Assets sitting at -21.16. When it comes to the capital structure of this company, Houghton Mifflin Harcourt Company [HMHC] has a Total Debt to Total Equity ratio set at 868.17. Additionally, HMHC Total Debt to Total Capital is recorded at 89.67, with Total Debt to Total Assets ending up at 38.86. Long-Term Debt to Equity for the company is recorded at 836.48, with the Long-Term Debt to Total Capital now at 86.40.

Reflecting on the efficiency of the workforce at the company, Houghton Mifflin Harcourt Company [HMHC] managed to generate an average of -$184,553 per employee. Receivables Turnover for the company is 6.10 with a Total Asset Turnover recorded at a value of 0.45.Houghton Mifflin Harcourt Company’s liquidity data is similarly interesting compelling, with a Quick Ratio of 0.80 and a Current Ratio set at 1.20.

Houghton Mifflin Harcourt Company [HMHC]: An earnings per share (EPS) analysis

With the latest financial reports released by the company, Houghton Mifflin Harcourt Company posted -0.3/share EPS, while the average EPS was predicted by analysts to be reported at -0.3/share. The progress of the company may be observed through the prism of EPS growth rate, while Wall Street analysts are focusing on predicting the 5-year EPS growth rate for HMHC. When it comes to the mentioned value, analysts are expecting to see the 5-year EPS growth rate for Houghton Mifflin Harcourt Company go to 5.00%.

An analysis of insider ownership at Houghton Mifflin Harcourt Company [HMHC]

There are presently around $1,148 million, or 88.40% of HMHC stock, in the hands of institutional investors. The top three institutional holders of HMHC stocks are: WELLINGTON MANAGEMENT GROUP LLP with ownership of 15,932,129, which is approximately -0.527% of the company’s market cap and around 0.80% of the total institutional ownership; BURGUNDY ASSET MANAGEMENT LTD., holding 10,659,616 shares of the stock with an approximate value of $110.65 million in HMHC stocks shares; and ALLIANCEBERNSTEIN L.P., currently with $92.35 million in HMHC stock with ownership of nearly 3.711% of the company’s market capitalization.

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Positions in Houghton Mifflin Harcourt Company stocks held by institutional investors increased at the end of May and at the time of the May reporting period, where 70 institutional holders increased their position in Houghton Mifflin Harcourt Company [NASDAQ:HMHC] by around 18,819,656 shares. Additionally, 65 investors decreased positions by around 18,786,205 shares, while 7 investors held positions by with 73,033,822 shares. The mentioned changes placed institutional holdings at 110,639,683 shares, according to the latest SEC report filing. HMHC stock had 32 new institutional investments in for a total of 5,192,036 shares, while 14 institutional investors sold positions of 2,273,458 shares during the same period.

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