10 Best Edutech for February 2026
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Market Overview & Selection Criteria
In the current market environment, value investors seek stocks trading below their intrinsic value amid sector rotations toward stable consumer goods, edutech innovators, and software providers. Value Sense's methodology identifies these opportunities using machine learning-driven intrinsic value calculations, quality ratings, ROIC, FCF margins, and growth metrics from comprehensive financial data. Stocks were selected based on high intrinsic value potential relative to market caps, strong margins despite varied 1Y returns, and diversification across consumer staples, beverages, government tech, education, and edutech sectors. This watchlist highlights top undervalued stocks with robust fundamentals for long-term analysis.
Featured Stock Analysis
Stock #1: Colgate-Palmolive Company (CL)
| Metric | Value |
|---|---|
| Market Cap | $71.2B |
| Quality Rating | 6.4 |
| Intrinsic Value | $81.7 |
| 1Y Return | -0.7% |
| Revenue | $20.1B |
| Free Cash Flow | $3,443.0M |
| Revenue Growth | (0.0%) |
| FCF margin | 17.1% |
| Gross margin | 60.1% |
| ROIC | 28.4% |
| Total Debt to Equity | 680.0% |
Investment Thesis
Colgate-Palmolive Company (CL) stands out with a Market Cap of $71.2B and a Quality rating of 6.4, showcasing resilient consumer staples fundamentals. Its Intrinsic value of $81.7 suggests undervaluation, supported by $20.1B in Revenue, $3,443.0M Free Cash Flow, and impressive Gross margin of 60.1%. Despite flat Revenue growth 0.0% and a 1Y Return of -0.7%, the ROIC at 28.4% and FCF margin of 17.1% indicate efficient capital allocation in a stable sector. High Total Debt to Equity at 680.0% warrants monitoring, but strong cash generation positions CL for defensive portfolio exposure.
Key Catalysts
- Exceptional ROIC 28.4% driving superior returns on invested capital
- High Gross margin 60.1% reflecting pricing power in essentials
- Robust Free Cash Flow $3,443.0M enabling dividends and buybacks
Risk Factors
- Elevated Total Debt to Equity 680.0% increasing leverage vulnerability
- Stagnant Revenue growth 0.0% amid competitive pressures
- Modest 1Y Return -0.7% signaling short-term market skepticism
Stock #2: Constellation Brands, Inc. (STZ)
| Metric | Value |
|---|---|
| Market Cap | $27.1B |
| Quality Rating | 6.1 |
| Intrinsic Value | $61.5 |
| 1Y Return | -14.5% |
| Revenue | $9,382.5M |
| Free Cash Flow | $432.4M |
| Revenue Growth | (7.9%) |
| FCF margin | 4.6% |
| Gross margin | 52.0% |
| ROIC | 19.6% |
| Total Debt to Equity | 133.3% |
Investment Thesis
Constellation Brands, Inc. (STZ), with a Market Cap of $27.1B and Quality rating of 6.1, offers value in beverages through an Intrinsic value of $61.5. Key metrics include $9,382.5M Revenue, $432.4M Free Cash Flow, and ROIC of 19.6%, despite -7.9% Revenue growth and -14.5% 1Y Return. FCF margin at 4.6% and Gross margin of 52.0% highlight operational efficiency, while Total Debt to Equity of 133.3% reflects sector norms. This positions STZ as a recovery play in consumer discretionary.
Key Catalysts
- Solid ROIC 19.6% supporting brand expansion
- Healthy Gross margin 52.0% from premium products
- Potential rebound from recent revenue dip
Risk Factors
- Declining Revenue growth -7.9% due to market shifts
- Low FCF margin 4.6% limiting flexibility
- Negative 1Y Return -14.5% indicating volatility
Stock #3: Tyler Technologies, Inc. (TYL)
| Metric | Value |
|---|---|
| Market Cap | $15.9B |
| Quality Rating | 6.2 |
| Intrinsic Value | $539.9 |
| 1Y Return | -38.3% |
| Revenue | $2,298.3M |
| Free Cash Flow | $618.9M |
| Revenue Growth | 10.6% |
| FCF margin | 26.9% |
| Gross margin | 44.8% |
| ROIC | 7.0% |
| Total Debt to Equity | 18.7% |
Investment Thesis
Tyler Technologies, Inc. (TYL) boasts a Market Cap of $15.9B and Quality rating of 6.2, with a compelling Intrinsic value of $539.9 signaling deep undervaluation. Metrics feature $2,298.3M Revenue, $618.9M Free Cash Flow, 10.6% Revenue growth, and FCF margin of 26.9%. ROIC at 7.0% and low Total Debt to Equity 18.7% underscore software stability, despite -38.3% 1Y Return and Gross margin of 44.8%. TYL suits tech-growth watchers.
Key Catalysts
- Strong Revenue growth 10.6% in government software
- High FCF margin 26.9% fueling R&D
- Low debt (18.7%) enhancing balance sheet strength
Risk Factors
- Weak ROIC 7.0% relative to peers
- Sharp 1Y Return decline -38.3% from market corrections
- Moderate Gross margin 44.8%
Stock #4: Pearson plc (PSO)
| Metric | Value |
|---|---|
| Market Cap | $8,745.6M |
| Quality Rating | 7.2 |
| Intrinsic Value | $20.7 |
| 1Y Return | -22.0% |
| Revenue | £7,069.0M |
| Free Cash Flow | £1,140.0M |
| Revenue Growth | (6.4%) |
| FCF margin | 16.1% |
| Gross margin | 51.0% |
| ROIC | 28.0% |
| Total Debt to Equity | 41.6% |
Investment Thesis
Pearson plc (PSO), Market Cap $8,745.6M and Quality rating 7.2, presents Intrinsic value of $20.7 in edutech. With £7,069.0M Revenue, £1,140.0M Free Cash Flow, FCF margin 16.1%, and ROIC 28.0%, it shows strength despite -6.4% Revenue growth and -22.0% 1Y Return. Gross margin 51.0% and Total Debt to Equity 41.6% support turnaround potential in digital learning.
Key Catalysts
- High ROIC 28.0% from asset efficiency
- Solid FCF margin 16.1% for reinvestment
- Strong Quality rating 7.2
Risk Factors
- Negative Revenue growth -6.4% in print transition
- 1Y Return drop -22.0%
- Currency exposure from GBP metrics
Stock #5: Duolingo, Inc. (DUOL)
| Metric | Value |
|---|---|
| Market Cap | $6,150.1M |
| Quality Rating | 7.2 |
| Intrinsic Value | $190.9 |
| 1Y Return | -63.1% |
| Revenue | $964.3M |
| Free Cash Flow | $354.1M |
| Revenue Growth | 39.9% |
| FCF margin | 36.7% |
| Gross margin | 72.0% |
| ROIC | 130.3% |
| Total Debt to Equity | 14.3% |
Investment Thesis
Duolingo, Inc. (DUOL), Market Cap $6,150.1M and top Quality rating 7.2, features Intrinsic value $190.9. Explosive 39.9% Revenue growth on $964.3M Revenue, $354.1M Free Cash Flow, FCF margin 36.7%, Gross margin 72.0%, and stellar ROIC 130.3% offset -63.1% 1Y Return. Low Total Debt to Equity 14.3% makes it a high-growth edutech standout.
Key Catalysts
- Exceptional Revenue growth 39.9% in language apps
- Outstanding ROIC 130.3% and Gross margin 72.0%
- High FCF margin 36.7%
Risk Factors
- Severe 1Y Return -63.1% from growth pricing
- High valuation expectations
- Competitive edutech space
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Stock #6: Graham Holdings Company (GHC)
| Metric | Value |
|---|---|
| Market Cap | $4,969.1M |
| Quality Rating | 6.2 |
| Intrinsic Value | $2,310.5 |
| 1Y Return | 25.4% |
| Revenue | $2,411.7M |
| Free Cash Flow | $361.4M |
| Revenue Growth | (48.8%) |
| FCF margin | 15.0% |
| Gross margin | 31.0% |
| ROIC | (0.9%) |
| Total Debt to Equity | 25.8% |
Investment Thesis
Graham Holdings Company (GHC), Market Cap $4,969.1M and Quality rating 6.2, has Intrinsic value $2,310.5. Positive 25.4% 1Y Return contrasts 48.8% Revenue growth on $2,411.7M Revenue, with $361.4M Free Cash Flow, 15.0% FCF margin. ROIC -0.9% and Gross margin 31.0% reflect diversification, Total Debt to Equity 25.8%.
Key Catalysts
- Strong 1Y Return 25.4% momentum
- Decent FCF margin 15.0%
- Broad holdings potential
Risk Factors
- Sharp Revenue growth drop -48.8%
- Negative ROIC -0.9%
- Low Gross margin 31.0%
Stock #7: Stride, Inc. (LRN)
| Metric | Value |
|---|---|
| Market Cap | $3,582.8M |
| Quality Rating | 7.1 |
| Intrinsic Value | $109.0 |
| 1Y Return | -36.9% |
| Revenue | $2,519.2M |
| Free Cash Flow | $259.4M |
| Revenue Growth | 14.9% |
| FCF margin | 10.3% |
| Gross margin | 39.3% |
| ROIC | 24.5% |
| Total Debt to Equity | 36.6% |
Investment Thesis
Stride, Inc. (LRN), Market Cap $3,582.8M and Quality rating 7.1, offers Intrinsic value $109.0. 14.9% Revenue growth on $2,519.2M Revenue, $259.4M Free Cash Flow, ROIC 24.5% shine despite -36.9% 1Y Return. FCF margin 10.3%, Gross margin 39.3%, Total Debt to Equity 36.6% support online education.
Key Catalysts
- Healthy Revenue growth 14.9%
- Strong ROIC 24.5%
- Solid Quality rating 7.1
Risk Factors
- Negative 1Y Return -36.9%
- Modest FCF margin 10.3%
- Education sector cyclicality
Stock #8: Blackbaud, Inc. (BLKB)
| Metric | Value |
|---|---|
| Market Cap | $2,513.7M |
| Quality Rating | 6.6 |
| Intrinsic Value | $7,202.6 |
| 1Y Return | -30.1% |
| Revenue | $282.0B |
| Free Cash Flow | $276.1M |
| Revenue Growth | 24,461.1% |
| FCF margin | 0.1% |
| Gross margin | 59.6% |
| ROIC | 4,571.7% |
| Total Debt to Equity | 984.0% |
Investment Thesis
Blackbaud, Inc. (BLKB), Market Cap $2,513.7M and Quality rating 6.6, shows extreme Intrinsic value $7,202.6. $282.0B Revenue, 24,461.1% Revenue growth, ROIC 4,571.7% highlight nonprofit software strength, with $276.1M Free Cash Flow, despite 0.1% FCF margin, 59.6% Gross margin, and 984.0% Total Debt to Equity. -30.1% 1Y Return offers entry.
Key Catalysts
- Massive Revenue growth 24,461.1%
- Extraordinary ROIC 4,571.7%
- High Gross margin 59.6%
Risk Factors
- Tiny FCF margin 0.1%
- High Total Debt to Equity 984.0%
- 1Y Return decline -30.1%
Stock #9: John Wiley & Sons, Inc. (WLY)
| Metric | Value |
|---|---|
| Market Cap | $1,624.8M |
| Quality Rating | 6.2 |
| Intrinsic Value | $32.3 |
| 1Y Return | -24.6% |
| Revenue | $1,665.8M |
| Free Cash Flow | $148.3M |
| Revenue Growth | (5.3%) |
| FCF margin | 8.9% |
| Gross margin | 70.3% |
| ROIC | 8.9% |
| Total Debt to Equity | 130.3% |
Investment Thesis
John Wiley & Sons, Inc. (WLY), Market Cap $1,624.8M and Quality rating 6.2, has Intrinsic value $32.3. $1,665.8M Revenue, $148.3M Free Cash Flow, 70.3% Gross margin, ROIC 8.9% persist amid -5.3% Revenue growth, -24.6% 1Y Return, 8.9% FCF margin, 130.3% Total Debt to Equity.
Key Catalysts
- Leading Gross margin 70.3% in publishing
- Stable ROIC 8.9%
- FCF margin 8.9% consistency
Risk Factors
- Declining Revenue growth -5.3%
- High debt 130.3%
- Negative 1Y Return -24.6%
Stock #10: Youdao, Inc. (DAO)
| Metric | Value |
|---|---|
| Market Cap | $1,247.1M |
| Quality Rating | 5.9 |
| Intrinsic Value | $10.4 |
| 1Y Return | 33.5% |
| Revenue | CN¥5,675.6M |
| Free Cash Flow | CN¥0.0 |
| Revenue Growth | (1.6%) |
| FCF margin | 0.0% |
| Gross margin | 44.9% |
| ROIC | 26.2% |
| Total Debt to Equity | (91.8%) |
Investment Thesis
Youdao, Inc. (DAO), Market Cap $1,247.1M and Quality rating 5.9, features Intrinsic value $10.4. CN¥5,675.6M Revenue, 33.5% 1Y Return, ROIC 26.2%, 44.9% Gross margin offset 0.0 Free Cash Flow, -1.6% Revenue growth, negative Total Debt to Equity -91.8%. Edutech exposure in China.
Key Catalysts
- Positive 1Y Return 33.5%
- Strong ROIC 26.2%
- Net cash position (-91.8% debt/equity)
Risk Factors
- Zero Free Cash Flow (CN¥0.0)
- Slight Revenue decline -1.6%
- Geopolitical China risks
Portfolio Diversification Insights
This stock watchlist balances consumer staples (CL, STZ), government tech (TYL), and edutech cluster (PSO, DUOL, GHC, LRN, BLKB, WLY, DAO) for reduced correlation. Large-caps like CL 31% provide stability, mid-caps (TYL, PSO 11-24%) growth, smaller edutech (17-5%) high-upside. Quality ratings average ~6.5, with edutech ROIC leaders (DUOL 130.3%) complementing staples' margins (CL 60.1%). Allocate 40% staples, 60% edutech for value-growth mix, minimizing sector overlap.
Market Timing & Entry Strategies
Consider entries on dips below intrinsic values (e.g., DUOL under $190.9, TYL under $539.9), using Value Sense screeners for ROIC >20% and FCF margins >10%. Monitor quarterly earnings for revenue inflection (e.g., DUOL's 39.9% growth). Dollar-cost average into high-quality (7.0+ ratings like PSO, DUOL) amid volatility, targeting 6-12 month holds for mean reversion in laggards (-30%+ 1Y returns).
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FAQ Section
How were these stocks selected?
Selected via Value Sense's intrinsic value models, prioritizing high quality ratings (avg. 6.5), strong ROIC/FCF margins, and undervaluation across edutech and staples for diversified stock picks.
What's the best stock from this list?
Duolingo (DUOL) leads with 7.2 quality rating, 39.9% revenue growth, 130.3% ROIC, and $190.9 intrinsic value, ideal for growth-oriented analysis.
Should I buy all these stocks or diversify?
Diversify across sectors like edutech 60% and staples 40% to balance growth (DUOL, LRN) with stability (CL), reducing single-stock risk.
What are the biggest risks with these picks?
High debt (CL 680%, BLKB 984%), revenue declines (GHC -48.8%), and negative returns (DUOL -63.1%) highlight leverage and cyclical vulnerabilities.
When is the best time to invest in these stocks?
Enter when prices dip below intrinsic values during market pullbacks, confirmed by improving revenue growth and FCF in Value Sense tools.