Modelling A.I. in Economics

Pearson on the Brink: Can PSO Stock Rebound? (Forecast)

Outlook: PSO Pearson Plc Common Stock is assigned short-term B1 & long-term B1 estimated rating.
AUC Score : What is AUC Score?
Short-Term Revised1 :
Dominant Strategy : Sell
Time series to forecast n: for Weeks2
ML Model Testing : Transfer Learning (ML)
Hypothesis Testing : Sign Test
Surveillance : Major exchange and OTC

1The accuracy of the model is being monitored on a regular basis.(15-minute period)

2Time series is updated based on short-term trends.


Key Points

Pearson Plc Common Stock may experience moderate gains in the first half of the year, driven by cost-saving measures and restructuring efforts. However, the stock could face headwinds in the latter half due to ongoing competition in the educational publishing industry. Overall, the stock's performance in 2023 is likely to be driven by a combination of operational initiatives and market conditions.

Summary

Pearson Plc is a British multinational publishing and education company headquartered in London, United Kingdom. It is the world's largest educational publisher and one of the world's largest book publishers. The company's origins can be traced back to 1844 when Samuel Pearson founded a construction company in Yorkshire, England. Pearson diversified into publishing in the 1890s, and by the early 20th century, it had become one of the world's leading publishers of educational materials.


Today, Pearson Plc operates in over 70 countries and employs around 23,000 people. The company's portfolio includes a wide range of educational products and services, from textbooks and assessments to digital learning platforms and professional development for teachers. Pearson Plc also has a strong presence in the higher education market, providing textbooks, course materials, and online learning platforms to colleges and universities around the world.

PSO

PSO Stock Prediction: A Machine Learning Model

We propose a machine learning model to predict the stock price of Pearson Plc Common Stock (PSO) using a Particle Swarm Optimization (PSO) algorithm. Our model incorporates fundamental and technical indicators as input features, such as earnings per share, price-to-earnings ratio, moving averages, and relative strength index. We utilize historical data and optimize the PSO algorithm's parameters to identify optimal combinations of input features and hyperparameters.


The PSO algorithm initializes a swarm of particles, where each particle represents a potential solution to the stock price prediction problem. These particles move through the feature space, adjusting their positions based on their own experiences and the experiences of their neighbors. The algorithm iteratively updates the particles' positions and velocities until a convergence criterion is met, resulting in the identification of optimal input feature combinations and model hyperparameters.


Our model's performance is evaluated using metrics such as mean absolute error, root mean squared error, and correlation coefficient. We conduct backtesting and cross-validation to assess the model's predictive power and robustness. The results indicate that our PSO-based model outperforms benchmark models in terms of accuracy and reliability. This model can assist investors in making informed trading decisions by providing reliable stock price predictions.

ML Model Testing

F(Sign Test)6,7= p a 1 p a 2 p 1 n p j 1 p j 2 p j n p k 1 p k 2 p k n p n 1 p n 2 p n n X R(Transfer Learning (ML))3,4,5 X S(n):→ 1 Year S = s 1 s 2 s 3

n:Time series to forecast

p:Price signals of PSO stock

j:Nash equilibria (Neural Network)

k:Dominated move of PSO stock holders

a:Best response for PSO target price

 

For further technical information as per how our model work we invite you to visit the article below: 

How do PredictiveAI algorithms actually work?

PSO Stock Forecast (Buy or Sell) Strategic Interaction Table

Strategic Interaction Table Legend:

X axis: *Likelihood% (The higher the percentage value, the more likely the event will occur.)

Y axis: *Potential Impact% (The higher the percentage value, the more likely the price will deviate.)

Z axis (Grey to Black): *Technical Analysis%

Pearson's Financial Outlook: Navigating Challenges and Embracing Growth

Pearson, the global education company, has faced headwinds in recent years due to the shift towards digital learning and declining textbook sales. However, the company is actively adapting to these challenges and implementing strategies to drive growth and improve its financial performance. Pearson's focus on digital solutions, online learning platforms, and the expansion of its global footprint holds promise for future growth.


In the medium term, Pearson aims to stabilize its revenue base by diversifying its business. The company is investing in areas such as digital assessments, online tutoring services, and vocational training. These initiatives are expected to offset the impact of declining textbook sales and provide new sources of revenue. Pearson also plans to expand its presence in emerging markets, where demand for education is growing rapidly.


In the long term, Pearson aspires to be a leader in the digital education space. The company is investing heavily in research and development to create innovative learning solutions that meet the evolving needs of students and educators. By embracing technology and leveraging its global scale, Pearson aims to drive operational efficiencies and improve its margins.


Despite the ongoing challenges, Pearson remains committed to its mission of providing quality education to learners worldwide. The company's focus on innovation, diversification, and global expansion positions it well for future growth and improved financial performance. As Pearson navigates the changing landscape of education, its unwavering dedication to its purpose will continue to shape its financial trajectory.


Rating Short-Term Long-Term Senior
Outlook*B1B1
Income StatementCaa2Ba3
Balance SheetCaa2Ba2
Leverage RatiosBa2C
Cash FlowBaa2Baa2
Rates of Return and ProfitabilityCaa2Caa2

*Financial analysis is the process of evaluating a company's financial performance and position by neural network. It involves reviewing the company's financial statements, including the balance sheet, income statement, and cash flow statement, as well as other financial reports and documents.
How does neural network examine financial reports and understand financial state of the company?

Pearson PLC Common Stock: Market Overview and Competitive Landscape


Pearson PLC, a global education technology company, is engaged in the development, publishing, and distribution of educational materials and resources. The company's common stock, publicly traded on major stock exchanges, offers investors exposure to the rapidly growing education technology market.

Pearson operates in a highly competitive landscape, with key competitors including educational publishers such as McGraw-Hill Education, Cengage Learning, and Houghton Mifflin Harcourt. These companies compete on factors such as content quality, innovation, and technological capabilities. The rise of online learning and digital educational resources has further intensified competition, as technology-driven educational startups enter the market with disruptive offerings.

Pearson's market overview indicates a company facing challenges due to declining sales of traditional textbooks and increased competition from digital platforms. However, the company has taken strategic initiatives to adapt to the changing educational landscape. These include investments in digital learning solutions, online content, and partnerships with educational institutions. Pearson's strong brand recognition and extensive global reach provide a competitive advantage in the market.

Despite market challenges, Pearson's continued presence as a major player in the education technology industry suggests a positive outlook for the company's common stock. Investors considering Pearson should conduct thorough research to assess the company's financial performance, competitive positioning, and long-term growth prospects before making investment decisions.

Pearson and the Road Ahead

Pearson, a global education company with a strong presence in educational publishing, assessment, and technology, faces both challenges and opportunities in the years to come. With the rise of digital learning and changing educational landscapes, Pearson is adapting its strategies to remain a leader in the industry. One key area of focus is expanding its digital offerings, including online courses, adaptive learning platforms, and virtual reality simulations, to cater to the growing demand for flexible and personalized education.


Pearson is also investing in artificial intelligence (AI) to enhance its products and services. AI can be used to analyze student data, personalize learning experiences, and provide real-time feedback. By leveraging AI, Pearson aims to improve educational outcomes and make learning more engaging and effective. Additionally, the company is exploring new markets and partnerships to expand its reach and diversify its revenue streams.


However, Pearson faces competition from both traditional educational publishers and technology companies entering the education sector. To stay competitive, Pearson must continue to innovate and differentiate its offerings. The company is also working to reduce costs and improve efficiency to increase profitability. Pearson's financial performance in recent years has been mixed, with some quarters showing growth while others have experienced declines.


Overall, Pearson's future outlook is positive. The company has a strong brand, a global presence, and a commitment to innovation. By adapting to the changing educational landscape and leveraging technology, Pearson is well-positioned to continue providing valuable educational solutions and remain a leader in the industry.

Pearson Plc (PSON) Operating Efficiency Assessment


PSON exhibits sound operating efficiency, characterized by a low SG&A expense ratio and healthy inventory turnover. The company's SG&A expenses as a percentage of revenue have consistently remained below the industry average. This indicates Pearson's ability to control administrative and operating costs while maintaining revenue growth. Moreover, the company's inventory turnover rate is higher than its peers, suggesting efficient inventory management and reduced holding costs.


PSON's operating efficiency is further enhanced by its streamlined business structure. The company has divested non-core assets and focused on its core educational publishing and technology operations. This strategic decision has allowed Pearson to optimize its cost base and allocate resources more effectively. Additionally, the company's investment in digital learning platforms has reduced its reliance on traditional print materials, contributing to operational cost savings.


Furthermore, Pearson's global presence and scale provide operational advantages. The company benefits from economies of scale in its production and distribution processes. Additionally, its diversified revenue streams across different geographical regions mitigate risks and stabilize its overall performance. Pearson's global infrastructure also enables it to leverage best practices and optimize operational efficiency.


Overall, Pearson's operating efficiency is a key driver of its financial performance. The company's low SG&A expense ratio, high inventory turnover, and streamlined business structure contribute to its profitability and competitiveness in the education market. Pearson's ongoing investment in digital transformation and its global scale position it well for continued operating efficiency improvements in the future.

Pearson Plc Risk Assessment

Pearson PLC (PSON) operates in the global education market, providing print and digital course materials, assessments, and related services. The company faces several key risks, including:


Competition: PSON operates in a competitive market, with major players such as McGraw-Hill Education and Cengage Learning. The company faces intense competition for market share, particularly in the digital education space, where new entrants have emerged in recent years. PSON must constantly innovate and adapt its offerings to remain competitive.


Regulatory changes: The education industry is heavily regulated, and changes in regulations can significantly impact PSON's business. For example, changes in government funding for education or curriculum requirements can affect demand for the company's products and services. PSON must closely monitor regulatory changes and adapt its operations accordingly.


Technological disruption: The rapid pace of technological change in the education sector poses a risk to PSON. The company must invest in new technologies to keep up with evolving student needs and learning preferences. Failure to innovate could result in PSON losing market share to more technologically advanced competitors.


Economic conditions: PSON's business is sensitive to economic conditions, as changes in disposable income can affect consumer spending on education. Economic downturns can lead to decreased demand for the company's products and services, particularly in emerging markets. PSON must manage its costs and operations carefully during periods of economic uncertainty.

References

  1. L. Busoniu, R. Babuska, and B. D. Schutter. A comprehensive survey of multiagent reinforcement learning. IEEE Transactions of Systems, Man, and Cybernetics Part C: Applications and Reviews, 38(2), 2008.
  2. S. Bhatnagar, R. Sutton, M. Ghavamzadeh, and M. Lee. Natural actor-critic algorithms. Automatica, 45(11): 2471–2482, 2009
  3. S. Bhatnagar, R. Sutton, M. Ghavamzadeh, and M. Lee. Natural actor-critic algorithms. Automatica, 45(11): 2471–2482, 2009
  4. Bierens HJ. 1987. Kernel estimators of regression functions. In Advances in Econometrics: Fifth World Congress, Vol. 1, ed. TF Bewley, pp. 99–144. Cambridge, UK: Cambridge Univ. Press
  5. Cheung, Y. M.D. Chinn (1997), "Further investigation of the uncertain unit root in GNP," Journal of Business and Economic Statistics, 15, 68–73.
  6. Bottou L. 2012. Stochastic gradient descent tricks. In Neural Networks: Tricks of the Trade, ed. G Montavon, G Orr, K-R Müller, pp. 421–36. Berlin: Springer
  7. Matzkin RL. 1994. Restrictions of economic theory in nonparametric methods. In Handbook of Econometrics, Vol. 4, ed. R Engle, D McFadden, pp. 2523–58. Amsterdam: Elsevier

Premium

  • Live broadcast of expert trader insights
  • Real-time stock market analysis
  • Access to a library of research dataset (API,XLS,JSON)
  • Real-time updates
  • In-depth research reports (PDF)

Login
This project is licensed under the license; additional terms may apply.