New Oriental Education & Technology (EDU)
NYSE:EDU
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New Oriental Education Tech
(NYSE:EDU)
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Rating:73Outperform
Price Target:
$63.00
▲(6.37% Upside)
Action:ReiteratedDate:04/22/26
The score is driven primarily by strong financial performance (profitability, low leverage, and solid cash-flow profile) and a constructive earnings call with raised guidance and margin-improvement focus. These positives are tempered by a high P/E valuation and a mixed/neutral technical backdrop.
Positive Factors
Profitability & Margins
New Oriental's high gross margin and improving net and operating margins reflect durable pricing power and operating leverage in education services. Sustained margin expansion cited by management (utilization, cost discipline, AI efficiency) supports long-term cash generation and reinvestment capacity.
Negative Factors
Rising Cost Base
Material increases in cost of revenue and operating expenses can erode margin durability if revenue growth slows. Persistent higher SG&A and share-based comp trends may limit free cash flow upside and require sustained efficiency gains to preserve long-term profitability.
Read all positive and negative factors
Positive Factors
Negative Factors
Profitability & Margins
New Oriental's high gross margin and improving net and operating margins reflect durable pricing power and operating leverage in education services. Sustained margin expansion cited by management (utilization, cost discipline, AI efficiency) supports long-term cash generation and reinvestment capacity.
Read all positive factors
New Oriental Education Tech (EDU) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$8.84B
Dividend Yield1.03%
Average Volume (3M)746.10K
Price to Earnings (P/E)17.0
Beta (1Y)0.68
Revenue Growth12.38%
EPS Growth11.05%
CountryUS
Employees67,935
SectorConsumer Defensive
Sector Strength42
IndustryEducation & Training Services
Share Statistics
EPS (TTM)0.95
Shares Outstanding163,528,840
10 Day Avg. Volume860,909
30 Day Avg. Volume746,101
Financial Highlights & Ratios
PEG Ratio0.98
Price to Book (P/B)2.09
Price to Sales (P/S)1.57
P/FCF Ratio12.04
Enterprise Value/Market Cap0.83
Enterprise Value/Revenue1.47
Enterprise Value/Gross Profit2.67
Enterprise Value/Ebitda11.28
Forecast
1Y Price Target
$76.30Price Target Upside28.82% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
EPS Forecast (FY)3.47
Revenue Forecast (FY)$5.56B
New Oriental Education Tech Business Overview & Revenue Model
Company Description
New Oriental Education & Technology Group Inc. provides private educational services under the New Oriental brand in the People's Republic of China. It operates through K-12 AST, Test Preparation and Other Courses; Online Education; and Others seg...
How the Company Makes Money
New Oriental primarily makes money by charging customers for education services and selling education-related products. Key revenue streams include: (1) Tuition and fees from educational programs: The company charges for enrollment in courses such...
New Oriental Education Tech Earnings Call Summary
Earnings Call Date:Apr 22, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Aug 04, 2026
Earnings Call Sentiment Positive
The call highlighted strong top-line growth (~19.8% YoY) and substantial profitability expansion (non-GAAP operating income +42.8%, non-GAAP net income +34.3%), reinforced by raised full-year guidance, significant liquidity, active share repurchases and dividends, and traction in new initiatives (AI, OMO, New Oriental Home, Easterby). Near-term headwinds include rising cost of revenue, increased SG&A and share-based compensation, a small operating cash outflow, and a planned Q4 one-off restructuring charge (~$10–15M) tied to overseas consolidation; overseas study consulting showed a ~4% revenue decline. Overall, positives (strong growth, margin expansion, guidance raise, capital returns, strategic initiatives) outweigh the drawbacks, while management emphasizes cost discipline and AI-driven efficiency going forward.Positive Updates
Strong Revenue Growth
Total net revenue rose 19.8% year over year to $1.4173 billion in Q3, driven by broad-based growth across core education and new initiatives.
Negative Updates
Rising Cost Base
Operating costs and expenses rose 16.9% YoY to $1.237 billion; cost of revenue increased 23.4% YoY to $656.2 million, pressuring gross margins despite overall margin improvement.
Read all updates
Q3-2026 Updates
Positive
Negative
Strong Revenue Growth
Total net revenue rose 19.8% year over year to $1.4173 billion in Q3, driven by broad-based growth across core education and new initiatives.
Read all positive updates
Company Guidance
Management guided that Q4 should deliver continued margin expansion despite one‑off overseas restructuring costs of roughly $10–$15 million (≈50–100 bps headwind), and reiterated confidence in fourth‑quarter profit margins and longer‑term margin improvement driven by higher utilization, cost discipline and AI efficiency; they raised full‑year FY2026 total net revenue guidance to $5.5614 billion–$5.5987 billion (up 13%–14% YoY), provided a near‑term group revenue target quoted in the call of $1.4296 billion–$140.6669 billion (stated as +15%–18% YoY in the transcript), plan 10%–15% capacity expansion for the year (8% net adds in Q1–Q3), expect marketing spend as a percentage of revenue to decline next year, confirmed a $0.12 per common share ($1.20 per ADS) annual dividend with a $0.06/$0.60 second installment payable in mid‑June 2026, and maintain a $300 million share‑repurchase authorization (≈3.3 million ADS repurchased for ~$184.3 million so far).New Oriental Education Tech Financial Statement Overview
Summary
Income Statement
85
Very Positive
Balance Sheet
78
Positive
Cash Flow
82
Very Positive
| Breakdown | TTM | May 2025 | May 2024 | May 2023 | May 2022 | May 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 4.99B | 4.90B | 4.31B | 3.00B | 3.11B | 4.28B |
| Gross Profit | 2.75B | 2.72B | 2.26B | 1.59B | 1.35B | 2.24B |
| EBITDA | 651.65M | 595.37M | 457.25M | 312.75M | -834.22M | 551.90M |
| Net Income | 367.45M | 372.44M | 309.59M | 177.34M | -1.19B | 334.41M |
Balance Sheet | ||||||
| Total Assets | 8.01B | 7.81B | 7.53B | 6.39B | 6.03B | 10.15B |
| Cash, Cash Equivalents and Short-Term Investments | 4.67B | 4.58B | 4.78B | 4.00B | 4.19B | 6.26B |
| Total Debt | 784.05M | 803.78M | 662.33M | 458.60M | 680.41M | 2.16B |
| Total Liabilities | 3.75B | 3.85B | 3.48B | 2.58B | 2.24B | 5.13B |
| Stockholders Equity | 3.95B | 3.66B | 3.78B | 3.60B | 3.71B | 4.91B |
Cash Flow | ||||||
| Free Cash Flow | 737.23M | 637.38M | 839.25M | 827.96M | -1.43B | 693.74M |
| Operating Cash Flow | 905.70M | 896.59M | 1.12B | 971.01M | -1.28B | 1.13B |
| Investing Cash Flow | -249.98M | -93.43M | -1.15B | -37.41M | 1.17B | -2.18B |
| Financing Cash Flow | -460.91M | -584.97M | -160.44M | -246.87M | -230.86M | 1.65B |
New Oriental Education Tech Technical Analysis
Positive
59.23
Price Trends
56.71
Positive
56.17
Positive
53.63
Positive
Market Momentum
0.49
Negative
62.94
Neutral
76.82
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 59.23 is above the 20-day moving average (MA) of 56.35, above the 50-day MA of 56.71, and above the 200-day MA of 53.63, indicating a bullish trend. The MACD of 0.49 indicates Negative momentum. The RSI at 62.94 is Neutral, neither overbought nor oversold. The STOCH value of 76.82 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 | $4.05B | 3.81 | 21.36% | ― | 10.93% | 2.97% | |
73 Outperform | $8.84B | 16.99 | 10.79% | 1.03% | 12.38% | 11.05% | |
70 Outperform | $6.57B | 3.76 | 7.83% | ― | 34.00% | 578.17% | |
64 Neutral | $1.03B | -11.97 | -10.06% | ― | 9.79% | 8.61% | |
62 Neutral | $20.33B | 14.63 | -3.31% | 3.23% | 1.93% | -12.26% | |
56 Neutral | $422.22M | -18.93 | -20.60% | ― | 35.18% | 66.84% | |
55 Neutral | $1.36B | 77.54 | -5.25% | ― | 5.20% | 28.06% |
* Consumer Defensive Sector Average
EDU
New Oriental Education Tech
53.32
5.01
10.37%
LRN
Stride
95.16
-47.09
-33.10%
TAL
TAL Education Group
10.85
2.10
24.00%
GOTU
Gaotu Techedu
1.86
-1.25
-40.19%
DAO
Youdao
11.50
2.61
29.36%
COUR
Coursera
6.11
-2.31
-27.43%
New Oriental Education Tech Corporate Events
New Oriental Posts Strong Q2 FY2026 Growth as Diversified Education and AI Strategy Gain Traction
Jan 28, 2026
On January 28, 2026, New Oriental reported unaudited results for the second quarter of fiscal 2026, covering the period ended November 30, 2025, showing a sharp acceleration in growth and profitability. Quarterly net revenues rose 14.7% year on ye...
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.