Skillsoft's Strategic Alternatives for GK: Can It Save the Core?

Skillsoft Corp. SKIL announced a review of strategic alternativesforthe Global Knowledge (GK) business segment in the third quarter of fiscal 2026, aiming for a potential sale. This decision has come in as the company witnessed a 6% year-over-year decline in its top line due to an 18% dip in GK revenues, which accounts for only 21.7% of the total revenues. 

Management deems the softness in demand for physical and virtual instructor-led sessions to be the primary cause behind the decline in the GK segment. This segment resulted in a $20.8-million non-cash goodwill impairment loss, leading to a $4.9-million adjusted net loss. The decision for a potential sale of the GK segment is made to stop its balance sheet from shrinking its market.

Then again, SKIL’s Talent Development Solutions (“TDS”) revenues fell a meagre 2% year over year due to a decline in B2C learner products. John Frederick, SKIL’s CFO, highlighted that GK’s negative impacts on financial position masked TDS enterprise stabilization. The company is highly optimistic about the future of the AI-native roadmap, mainly the Percipio Platform. An early sign of success is demonstrated by the signing of its first four large enterprise customers.

Management’s proactive decision not to provide revenues and adjusted EBITDA guidance for the GK segment, while reaffirming the TDS segment’s outlook, reflects the company’s motive to be judged solely on its digital subscription business. While aiming for a positive free cash flow is a bleak expectation, a good riddance to the GK segment may be the only possible way to put the business on track for growth.

SKIL’s Price Performance, Valuation & Estimates

Skillsoft has lost 45.5% in the past three months, underperforming the industry’s 1.3% growth. Meanwhile, SKIL’s industry peer Coherent Corp. COHR has surged 80.1%, while Dave DAVE has fallen 1%.

3-Month Share Price Performance

From a valuation standpoint, SKIL trades at a 12-month forward price-to-sales ratio of 0.12. It trades cheaper than Coherent’s 4.21 and Dave’s 4.56.

Skillsoft has a Value Score of A. Coherent and Dave carry a Value Score of D.

The Zacks Consensus Estimate for EPS for 2025 is set at $4.17, which has been revised up 19.8% over the past 60 days. The consensus mark for EPS for 2026 is pegged at $4.54, which has been revised down 9.9% over the past 60 days.

SKIL sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research