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New Oriental Education & Technology (EDU)
NYSE:EDU
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New Oriental Education Tech
(NYSE:EDU)
72Outperform
Positive Factors
Financial Performance
Non-GAAP operating profit margin contraction was better than expected, indicating efficient cost control measures.
Market Position
New Oriental is still gaining market share.
Negative Factors
Earnings Guidance
Management gave weak guidance for 3QF25, mainly hampered by slower-than-expected growth in overseas test prep, new businesses, and cultural tourism.
Revenue Growth
Macro uncertainty to impact revenue growth.
New Oriental Education Tech (EDU) vs. S&P 500 (SPY)
Market Cap
$8.07B
Dividend YieldN/A
Average Volume (3M)1.61M
Price to Earnings (P/E)20.6
Beta (1Y)0.59
Revenue Growth18.73%
EPS Growth26.72%
CountryUS
Employees67,935
SectorTechnology
Sector Strength65
IndustryEducation & Training Services
Share Statistics
EPS (TTM)2.37
Shares Outstanding163,528,840
10 Day Avg. Volume1,792,173
30 Day Avg. Volume1,606,943
Financial Highlights & Ratios
PEG Ratio0.77
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap0.54
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit1.94
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$68.10Price Target Upside39.32% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
New Oriental Education Tech Business Overview & Revenue Model
Company DescriptionNew 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 segments. The company offers test preparation courses to students taking language and entrance exams used by educational institutions in the United States, the People's Republic of China, and the Commonwealth countries; and after-school tutoring courses for middle and high school students to enhance their exam scores, as well as for children to teach English. It also provides language training courses, including English, as well as other foreign languages, such as German, Japanese, French, Korean, Italian, and Spanish; operates a full-time private primary and secondary school in Yangzhou seeking a full curriculum with a focus on English; develops and edits educational materials for language training and test preparation; and offers online education programs that include college, K-12, and pre-school education. In addition, the company offers overseas studies consulting and overseas study tour services. As of May 31, 2021, it offered educational programs, services, and products to students through a network of 122 schools, 1,547 learning centers, and 11 bookstores, as well as through its online learning platforms. The company was founded in 1993 and is headquartered in Beijing, the People's Republic of China.
How the Company Makes MoneyNew Oriental Education Tech generates revenue primarily through tuition fees for its various educational services. The company's key revenue streams include language training programs, which encompass English and other foreign language courses, as well as test preparation services for exams such as the GRE, GMAT, TOEFL, and IELTS. Additionally, New Oriental offers K-12 after-school tutoring services, which contribute significantly to its earnings. The company also benefits from its online education platforms, which have expanded its reach and facilitated growth in digital learning amidst increasing demand for online education. Partnerships with educational content providers and technology firms further bolster its revenue by enhancing the quality and accessibility of its offerings.
New Oriental Education Tech Financial Statement Overview
Summary
New Oriental Education Tech is showing a favorable financial trajectory with strong profitability and stable financial health. The income statement reveals impressive growth and margin improvement, while the balance sheet indicates a low-leverage, equity-strong structure. Cash flow management is effective, though declining free cash flow growth suggests areas for potential improvement. Overall, the company is well-positioned in the education sector, with a solid financial foundation for future growth.Income Statement
The income statement reflects a strong recovery with significant revenue growth of 11.13% in the TTM, after a previous decline. Gross Profit Margin stands at 55.06% and Net Profit Margin at 8.17%, both indicators of solid profitability within the education sector. The EBIT and EBITDA margins are 9.34% and 10.30% respectively, showing efficient operations. The company has improved its financial performance considerably compared to the challenging fiscal 2022.85
Very Positive
Balance Sheet
The balance sheet showcases a stable financial position with an Equity Ratio of 49.49%, indicative of strong equity financing. The Debt-to-Equity Ratio is 0.20, reflecting low leverage. Return on Equity (ROE) is at 10.62%, marking a healthy return for shareholders. The company's asset base has grown while managing liabilities effectively, maintaining a robust equity position.78
Positive
Cash Flow
Cash flows indicate solid management of liquidity with a Free Cash Flow to Net Income Ratio of 1.80, demonstrating efficient cash conversion. Operating Cash Flow to Net Income Ratio is 2.23, highlighting strong cash-generating capability. However, the Free Cash Flow Growth Rate is -16.00%, signaling a reduction compared to the previous period, which may need monitoring.75
Positive
| Breakdown | ||||
| Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 | Jun 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 4.31B | 3.00B | 3.11B | 4.28B | 3.58B | Gross Profit |
| 2.26B | 1.59B | 1.35B | 2.24B | 1.99B | EBIT |
| 350.43M | 190.05M | -982.51M | 394.01M | 266.45M | EBITDA |
| 457.25M | 312.75M | -834.22M | 551.90M | 643.30M | Net Income Common Stockholders |
| 309.59M | 177.34M | -1.17B | 231.39M | 413.33M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 4.78B | 4.00B | 4.19B | 6.26B | 3.52B | Total Assets |
| 7.53B | 6.39B | 6.03B | 10.15B | 6.56B | Total Debt |
| 662.33M | 458.60M | 680.41M | 2.16B | 1.58B | Net Debt |
| -727.03M | -1.20B | -468.23M | 550.08M | 664.99M | Total Liabilities |
| 3.48B | 2.58B | 2.24B | 5.13B | 3.69B | Stockholders Equity |
| 3.78B | 3.60B | 3.71B | 4.91B | 2.74B |
| Cash Flow | Free Cash Flow | |||
| 839.25M | 827.96M | -1.43B | 693.74M | 494.91M | Operating Cash Flow |
| 1.12B | 971.01M | -1.28B | 1.13B | 804.46M | Investing Cash Flow |
| -1.15B | -37.41M | 1.17B | -2.18B | -1.26B | Financing Cash Flow |
| -160.44M | -246.87M | -230.86M | 1.65B | -17.86M |
New Oriental Education Tech Technical Analysis
Neutral
48.88
Price Trends
47.35
Positive
52.07
Negative
58.77
Negative
Market Momentum
0.21
Negative
59.98
Neutral
91.08
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EDU, the sentiment is Neutral. The current price of 48.88 is above the 20-day moving average (MA) of 45.14, above the 50-day MA of 47.35, and below the 200-day MA of 58.77, indicating a neutral trend. The MACD of 0.21 indicates Negative momentum. The RSI at 59.98 is Neutral, neither overbought nor oversold. The STOCH value of 91.08 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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
Overall Rating
UnderperformOutperform
Sector (59)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $6.19B | 22.21 | 23.76% | ― | 14.90% | 60.56% | |
73 Outperform | $5.09B | 23.13 | 30.13% | ― | 7.50% | 13.70% | |
72 Outperform | $8.07B | 20.60 | 10.36% | ― | 18.73% | 26.72% | |
72 Outperform | $5.29B | 63.54 | 2.28% | ― | 55.62% | ― | |
59 Neutral | $10.75B | 10.37 | -6.64% | 3.00% | 7.30% | -12.02% | |
54 Neutral | $1.02B | 89.29 | 25.15% | ― | 3.01% | ― | |
54 Neutral | $789.62M | ― | -41.45% | ― | 51.50% | -70812.50% |
* Technology Sector Average
Performance Comparison
EDU
New Oriental Education Tech
48.88
-35.06
-41.77%
LOPE
Grand Canyon Education
178.97
42.86
31.49%
LRN
Stride
150.70
80.88
115.84%
TAL
TAL Education Group
8.73
-4.45
-33.76%
GOTU
Gaotu Techedu
3.25
-3.73
-53.44%
DAO
Youdao
8.67
5.08
141.50%
New Oriental Education Tech Earnings Call Summary
Earnings Call Date:Apr 23, 2025
(Q3-2025)
| % Change Since: 10.11%|
Next Earnings Date:Jul 23, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed outlook. While there is notable growth in specific segments like the integrated tourism-related business and investments in AI, the overall revenue decrease and challenges in overseas markets dampen the positive aspects. The financial performance shows both progress and areas needing improvement, with a balanced outlook for the future.Q3-2025 Updates
Positive Updates
Revenue Growth in Core Educational Business
Despite an overall revenue decrease of 2%, the net revenue excluding Eastbuy increased by 21.2% year over year, driven by new ventures.
Strong Performance in Integrated Tourism-Related Business
The integrated tourism-related business recorded an exceptional revenue increase of 85% year over year for the quarter.
Investment in AI-Powered Education Solutions
New Oriental invested $29.7 million in AI integration for education solutions, enhancing student outcomes and operational efficiency.
Share Repurchase Program
The share repurchase program was extended and increased to $700 million, with $695.5 million already repurchased.
Steady Growth Across Various Business Lines
The overseas study consulting business increased by 21%, and the adults and university students business increased by 17% year over year.
Negative Updates
Decrease in Overall Revenue
Overall revenue decreased by 2% year over year, indicating challenges in specific segments.
Increased Operating Costs in Certain Areas
Selling and marketing expenses increased by 13.13%, and G&A expenses increased by 19.8% year over year.
Slowdown in Overseas-Related Business
The overseas-related business is expected to grow only by 5% to 10% in the upcoming quarter due to macroeconomic and international relation challenges.
Non-GAAP Income Decrease
Non-GAAP net income decreased by 14.3% year over year, pointing to financial pressures in the quarter.
Company Guidance
During the third fiscal quarter of 2025 earnings call, guidance for the next quarter was provided by Stephen Yang, Executive President and CFO of New Oriental Education & Technology Group Inc. They forecasted that the total net revenue, excluding Eastbuy, is expected to be between $1,009.1 million and $1,036.6 million, representing a year-over-year increase of 10% to 13%. The projected revenue growth in RMB is expected to be 12% to 15%. The guidance also highlighted a focus on cost control and efficiency enhancements, initiated in the current quarter, which are anticipated to positively impact the non-GAAP operating margin of the educational business in the fourth quarter. The company remains optimistic about achieving sustainable growth through strategic investments, especially in AI and technology integration.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.