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New Oriental Education Tech
(NYSE:EDU)
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Rating:74Outperform
Price Target:
$59.00
▲(19.82% Upside)
Action:Reiterated
Date:08/17/26
Overall score reflects strong fundamentals (revenue and margin recovery, low leverage) and a constructive earnings outlook with solid visibility and shareholder returns, partly offset by mixed technicals and remaining volatility/expense and CapEx pressures highlighted in the latest call.
Positive Factors
Revenue recovery and forward growth
The multi-year revenue recovery and 14%–18% FY2027 growth outlook indicate renewed demand and improving execution. Deferred revenue growth and stronger enrollments also provide visibility, supporting continued expansion over the next several quarters.
Negative Factors
Persistent cost and earnings pressure
Rapid cost growth and weaker non-GAAP net income show that revenue expansion is not yet translating consistently into bottom-line growth. Restructuring, marketing, and general expenses could limit the durability of margin gains.
Read all positive and negative factors
Positive Factors
Negative Factors
Revenue recovery and forward growth
The multi-year revenue recovery and 14%–18% FY2027 growth outlook indicate renewed demand and improving execution. Deferred revenue growth and stronger enrollments also provide visibility, supporting continued expansion over the next several quarters.
Read all positive factors
New Oriental Education Tech (EDU) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$9.00B
Dividend Yield2.15%
Average Volume (3M)547.90K
Price to Earnings (P/E)18.6
Beta (1Y)0.50
Revenue Growth15.64%
EPS Growth32.37%
CountryUS
Employees76,646
SectorConsumer Defensive
Sector Strength42
IndustryEducation & Training Services
Share Statistics
EPS (TTM)3.00
Shares Outstanding165,512,440
10 Day Avg. Volume737,526
30 Day Avg. Volume547,899
Financial Highlights & Ratios
PEG Ratio0.52
Price to Book (P/B)1.86
Price to Sales (P/S)1.31
P/FCF Ratio7.24
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$70.75Price Target Upside43.68% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
EPS Forecast (FY)4.43
Revenue Forecast (FY)$6.62B
New Oriental Education Tech Business Overview & Revenue Model
Company Description
New Oriental Education & Technology Group Inc. (EDU) operates as a prominent private education provider throughout the People's Republic of China, primarily recognized by its "New Oriental" brand. The company organizes its operations across key se...
How the Company Makes Money
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New Oriental Education Tech Earnings Call Summary
Earnings Call Date:Jul 29, 2026
(Q4-2026)
| % Change Since: |
Next Earnings Date:Oct 28, 2026
Earnings Call Sentiment Positive
The call presented a strong set of operating and cash metrics (23% revenue growth, +34.7% non-GAAP operating income, sizable cash balance and deferred revenue growth), meaningful early traction for AI-driven and lifestyle initiatives (New Oriental Home, East Buy) and an assertive shareholder return program. At the same time, the company faces cost and expense pressure (notably higher cost of revenues and S&M), a decline in non-GAAP net income, mixed overseas recovery and ongoing CapEx commitments. Management emphasized continued cost control, further AI-driven efficiency gains and optimistic FY2027 guidance (14%–18% revenue growth), which, combined with the balance sheet strength and buyback/dividend plans, tilt the overall view positively despite the notable near-term expense and segment-level headwinds.Positive Updates
Strong Top-Line and Operating Performance
Total net revenue grew 23% YoY to $1,529.5 million. Non-GAAP operating income increased 34.7% YoY to $110.0 million. GAAP operating income was $85.8 million versus an operating loss of $8.7 million in the prior-year period. Net income attributable to New Oriental rose to $62.2 million, a 775.8% YoY increase.
Negative Updates
Rising Costs and Expense Pressure
Operating costs and expenses for the quarter rose 15.3% YoY to $1,443.7 million. Cost of revenues increased 25.9% YoY to $717.3 million. Selling and marketing expense increased 23.9% YoY to $262.5 million, and G&A rose 13.2% YoY to $463.9 million. Management cited one-time restructuring expenses of roughly $10–15 million this quarter that weighed on margins.
Read all updates
Q4-2026 Updates
Positive
Negative
Strong Top-Line and Operating Performance
Total net revenue grew 23% YoY to $1,529.5 million. Non-GAAP operating income increased 34.7% YoY to $110.0 million. GAAP operating income was $85.8 million versus an operating loss of $8.7 million in the prior-year period. Net income attributable to New Oriental rose to $62.2 million, a 775.8% YoY increase.
Read all positive updates
Company Guidance
Management guided fiscal 2027 total net revenue of $6,453.9M–$6,680.3M (up 14%–18% year‑over‑year), with particular confidence in Q1 driven by a 14.8% y/y increase in deferred revenue to $2,242.9M and improving summer enrollments; they expect K‑12 growth of ~20% y/y, overseas test‑prep/consulting to be flat to low‑single‑digit, and continued margin expansion across the group (Q4 non‑GAAP operating income was $110M, +34.7% y/y, and Q4 operating income was $85.8M with ~60 bps of margin improvement). Management said meaningful cost improvement will come from overseas restructuring and AI‑led efficiency (roughly $100M of cost savings achieved in FY26 with more expected in FY27), CapEx guidance is $250M–$300M, and liquidity remains strong (cash & equivalents $1,821.2M, term deposits $1,366.8M, short‑term investments $2,372.3M, Q4 operating cash inflow ~$518.7M). The Board approved a FY27 capital‑return package of about $500M (≈$300M ordinary cash dividend payable in two installments and up to $200M in share repurchases); the company had already repurchased ~51.5M shares for ≈$274M under the prior $300M authorization as of July 28.New Oriental Education Tech Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
82
Very Positive
Cash Flow
74
Positive
| Breakdown | May 2026 | May 2025 | May 2024 | May 2023 | May 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 5.68B | 4.90B | 4.31B | 3.00B | 3.11B |
| Gross Profit | 3.10B | 2.72B | 2.26B | 1.59B | 1.35B |
| EBITDA | 645.55M | 595.37M | 542.03M | 424.84M | -834.22M |
| Net Income | 476.87M | 372.44M | 309.59M | 177.34M | -1.19B |
Balance Sheet | |||||
| Total Assets | 8.79B | 7.81B | 7.53B | 6.39B | 6.03B |
| Cash, Cash Equivalents and Short-Term Investments | 5.29B | 4.58B | 4.78B | 4.00B | 4.19B |
| Total Debt | 848.83M | 803.78M | 662.33M | 458.60M | 680.41M |
| Total Liabilities | 4.47B | 3.85B | 3.48B | 2.58B | 2.24B |
| Stockholders Equity | 3.99B | 3.66B | 3.78B | 3.60B | 3.71B |
Cash Flow | |||||
| Free Cash Flow | 1.03B | 637.38M | 839.25M | 827.96M | -1.43B |
| Operating Cash Flow | 1.03B | 896.59M | 1.12B | 971.01M | -1.28B |
| Investing Cash Flow | -457.70M | -93.43M | -1.15B | -37.41M | 1.17B |
| Financing Cash Flow | -380.15M | -584.97M | -160.44M | -246.87M | -230.86M |
New Oriental Education Tech Technical Analysis
Positive
49.24
Price Trends
50.62
Positive
51.25
Positive
53.20
Positive
Market Momentum
1.13
Positive
56.38
Neutral
66.78
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EDU, the sentiment is Positive. The current price of 49.24 is below the 20-day moving average (MA) of 55.37, below the 50-day MA of 50.62, and below the 200-day MA of 53.20, indicating a bullish trend. The MACD of 1.13 indicates Positive momentum. The RSI at 56.38 is Neutral, neither overbought nor oversold. The STOCH value of 66.78 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for EDU.
New Oriental Education Tech Risk Analysis
New Oriental Education Tech disclosed 82 risk factors in its most recent earnings report. New Oriental Education Tech reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
New Oriental Education Tech Peers Comparison
UnderperformOutperform
Sector (62)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $5.45B | 2.29 | 24.59% | ― | 32.55% | 846.04% | |
74 Outperform | $9.00B | 18.62 | 11.96% | 2.44% | 15.64% | 32.37% | |
71 Outperform | $3.51B | 10.65 | 21.31% | ― | 4.69% | 18.43% | |
62 Neutral | $20.33B | 14.63 | -3.31% | 3.23% | 1.93% | -12.26% | |
59 Neutral | $1.59B | -8.42 | -17.74% | ― | 22.69% | -112.56% | |
58 Neutral | $381.36M | -10.12 | -30.05% | ― | 26.62% | 52.16% | |
55 Neutral | $2.21B | 91.23 | -8.24% | ― | 10.03% | -27.61% |
* Consumer Defensive Sector Average
EDU
New Oriental Education Tech
55.80
9.40
20.26%
LRN
Stride
84.36
-82.01
-49.29%
TAL
TAL Education Group
11.32
0.52
4.81%
GOTU
Gaotu Techedu
1.68
-2.10
-55.56%
DAO
Youdao
18.34
9.41
105.38%
COUR
Coursera
6.00
-5.14
-46.14%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.