WLY

Wiley is a turnaround that has reached the inflection. After three years of shrinking revenue ($2.08B in FY2022 to $1.68B), the top line is now essentially flat (-0.1%), while profitability has snapped back hard: operating income +25% to $277M, GAAP diluted EPS $4.16 (+$2.63), and ROE of 26.1%. The business is structurally attractive — 78.5% gross margin, 85% digital revenue, 48% recurring, and $261M of operating cash flow against just $51M of capex (~$210M free cash). At $47.16 the stock trades at 11.3x EPS and 1.5x sales, with an ~8.5% FCF yield and a ~3% dividend ($74.4M paid) backstopped by $100M of buybacks that are shrinking the share count (-2.9%). That is a cheap price for a profitable, cash-generative franchise.

The forward picture has a genuine, non-hyped catalyst: management discloses $49.1M of AI license revenue in FY2026, and the strategy explicitly leans on 'the ever-increasing need for authoritative content to fuel AI models' — Wiley's peer-reviewed STM archive is exactly the licensable, proprietary content AI builders want. The June 2026 acquisition of Emerald Publishing (~$452M; 480+ journals, 8,000 books) extends scale in Research and the AI-content moat. Adjusted EBITDA grew 10% to $439.6M and adjusted EPS +15% to $4.19, so the underlying earnings power is real, not a one-off from lapping FY2024's -$200M impairment year.