Stock Story -
What Happened: Shares of educational publishing company John Wiley & Sons (NYSE:WLY) jumped 19.4% in the pre-market session after the company reported first-quarter results that beat analysts' revenue and EPS estimates. The results showed that the company is benefitting from the growing AI trend, as the topline outperformance was mostly driven by a $23 million content rights project for training GenAI large language.
Looking ahead, management expects an executed GenAI project with a large tech company to be realized in FY25, which should boost sales as the FY’25 revenue outlook came in ahead of consensus.
Moving to the bottom line, profitability is expected to improve with management closing two-thirds of non-core divestitures and actioning $90 million of $130 million run-rate cost savings.
Overall, this quarter's results seemed fairly positive, and shareholders should feel optimistic.
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What is the market telling us: John Wiley & Sons's shares are somewhat volatile and over the last year have had 4 moves greater than 5%. But moves this big are very rare even for John Wiley & Sons and that is indicating to us that this news had a significant impact on the market's perception of the business.
The biggest move we wrote about over the last year was 3 months ago, when the stock gained 11.1% on the news that the company reported third quarter results that beat analysts' revenue expectations. EPS guidance for the full was also above expectations, another big positive.
On the other hand, its full-year revenue guidance missed and its operating margin fell short of Wall Street's estimates.
Overall, this was a mixed quarter for John Wiley & Sons, but the market seems to be shrugging off the negatives and focusing on the above-expectation guidance for EPS this coming year.
John Wiley & Sons is up 33.8% since the beginning of the year. Investors who bought $1,000 worth of John Wiley & Sons's shares 5 years ago would now be looking at an investment worth $914.99.
