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New Oriental Education & Technology (EDU)
NYSE:EDU
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New Oriental Education Tech
(NYSE:EDU)
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Rating:77Outperform
Price Target:
$68.00
▲(21.75% Upside)
New Oriental Education Tech's strong financial performance and stable growth trajectory are the primary drivers of its overall score. The company's robust cash flow and low leverage enhance its financial stability. Technical indicators suggest a bullish trend, although valuation metrics indicate moderate pricing. The earnings call highlighted positive growth and shareholder returns, despite some challenges in overseas segments.
Positive Factors
Revenue Growth
Projected revenue growth of 5% to 10% indicates a strong market position and effective business strategies, supporting long-term expansion.
Cash Flow Generation
Robust cash flow growth enhances financial stability, enabling strategic investments and shareholder returns, crucial for sustained business health.
New Educational Initiatives
Successful new initiatives in non-academic tutoring and intelligent learning systems drive diversification and future revenue streams.
Negative Factors
Decreased Net Income
A decline in net income may indicate challenges in cost management or market conditions, potentially affecting profitability and investment capacity.
Increased Operating Costs
Rising operating costs could pressure margins, reducing financial flexibility and impacting long-term profitability if not managed effectively.
Challenges in Overseas Business
Difficulties in overseas segments may hinder growth potential and require strategic adjustments to maintain competitive positioning.
New Oriental Education Tech (EDU) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$9.65B
Dividend YieldN/A
Average Volume (3M)1.14M
Price to Earnings (P/E)24.4
Beta (1Y)0.60
Revenue Growth7.22%
EPS Growth-2.84%
CountryUS
Employees67,935
SectorConsumer Defensive
Sector Strength42
IndustryEducation & Training Services
Share Statistics
EPS (TTM)1.61
Shares Outstanding163,528,840
10 Day Avg. Volume1,279,598
30 Day Avg. Volume1,144,862
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 Cap0.41
Enterprise Value/Revenue0.80
Enterprise Value/Gross Profit1.44
Enterprise Value/Ebitda6.59
Forecast
1Y Price Target
$67.44Price Target Upside20.75% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
EPS Forecast (FY)3.3
Revenue Forecast (FY)$5.37B
New Oriental Education Tech Business Overview & Revenue Model
Company DescriptionNew Oriental Education Tech (EDU) is a leading provider of private educational services in China, primarily focusing on language training, test preparation, and K-12 education. The company offers a wide range of products and services, including online and offline classes, tutoring, and educational materials. New Oriental operates through various segments, including adult language training, test preparation courses for exams such as TOEFL and GRE, and K-12 tutoring, catering to students of all ages and educational needs.
How the Company Makes MoneyNew Oriental generates revenue primarily through tuition fees for its educational programs and services. Key revenue streams include fees from language training courses, test preparation classes, and K-12 tutoring services. The company also earns money from the sale of educational materials and books. Additionally, New Oriental has developed online learning platforms that have expanded its reach and allowed for the monetization of digital content. Significant partnerships with educational institutions and technology companies have further enhanced its offerings and contributed to its revenue growth.
New Oriental Education Tech Earnings Call Summary
Earnings Call Date:Oct 28, 2025
(Q1-2026)
| % Change Since: |
Next Earnings Date:Jan 27, 2026
Earnings Call Sentiment Neutral
The earnings call reflects a period of stable growth for New Oriental, with positive revenue and operational margin improvements. However, challenges persist in overseas segments and net income faced a slight decline. The company remains optimistic with a proactive shareholder return strategy and improved outlook for future quarters.Q1-2026 Updates
Positive Updates
Stable Growth Trajectory
New Oriental has entered a stable growth trajectory, with total net revenue increasing by 6.1% year-over-year and non-GAAP operating margin improving by 100 basis points to 22%.
Strong Performance in New Educational Initiatives
The new educational business initiatives recorded a revenue increase of about 15% year-over-year for the first quarter of 2026, driven by non-academic tutoring and intelligent learning systems.
Positive Outlook and Shareholder Returns
Guidance for the second quarter projects a 9% to 12% year-over-year increase in total net revenue. A shareholder return plan includes a $190 million dividend and a $300 million share repurchase program.
Increased Deferred Revenue
Deferred revenue increased by 10% compared to the previous year, indicating strong upfront cash collection from customers.
Negative Updates
Decreased Net Income
Net income attributable to New Oriental for the quarter was $240.7 million, representing a 1.9% decrease year-over-year.
Increased Operating Costs
Operating costs and expenses increased by 6.1% year-over-year, with cost of revenues rising by 9.3%.
Challenges in Overseas Business
Overseas test prep and consulting businesses faced challenges, with expected revenue declines in the upcoming quarter due to external factors and competitive pressures.
Higher Tax Rate
The effective tax rate increased to 27% due to withholding tax on dividends, compared to a typical rate of 25%.
Company Guidance
In the recent earnings call for New Oriental's fiscal year 2026 first quarter, the company reported a 6.1% year-over-year increase in total net revenue, with a non-GAAP operating margin reaching 22%, marking a 100 basis point improvement. The overseas test prep and consulting businesses saw modest revenue increases of 1% and 2%, respectively, while the adults and university students business experienced a 14% rise. The company's non-academic tutoring and intelligent learning system initiatives, which have expanded to around 60 cities, showed a revenue increase of approximately 15% year-over-year. East Buy's performance included strategic investments in its private label portfolio, contributing to the overall positive results. For the second quarter of fiscal year 2026, New Oriental expects total net revenue to grow between 9% and 12%, with the full fiscal year revenue anticipated to increase by 5% to 10%. The company also announced a shareholder return plan involving a cash dividend and a share repurchase program totaling up to $490 million.New Oriental Education Tech Financial Statement Overview
Summary
New Oriental Education Tech demonstrates strong financial performance with significant revenue growth and solid profitability in income statement metrics. The balance sheet shows low leverage and good equity financing, while cash flow management is effective despite a decline in free cash flow 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.82
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 4.90B | 4.90B | 4.31B | 3.00B | 3.11B | 4.28B |
| Gross Profit | 2.72B | 2.72B | 2.26B | 1.59B | 1.35B | 2.24B |
| EBITDA | 595.37M | 595.37M | 457.25M | 312.75M | -834.22M | 551.90M |
| Net Income | 371.74M | 372.44M | 309.59M | 177.34M | -1.19B | 334.41M |
Balance Sheet | ||||||
| Total Assets | 7.81B | 7.81B | 7.53B | 6.39B | 6.03B | 10.15B |
| Cash, Cash Equivalents and Short-Term Investments | 4.76B | 4.76B | 4.78B | 4.00B | 4.19B | 6.26B |
| Total Debt | 803.77M | 803.77M | 662.33M | 458.60M | 680.41M | 2.16B |
| Total Liabilities | 3.85B | 3.85B | 3.48B | 2.58B | 2.24B | 5.13B |
| Stockholders Equity | 3.66B | 3.66B | 3.78B | 3.60B | 3.71B | 4.91B |
Cash Flow | ||||||
| Free Cash Flow | 703.33M | 637.38M | 839.25M | 827.96M | -1.43B | 693.74M |
| Operating Cash Flow | 896.59M | 896.59M | 1.12B | 971.01M | -1.28B | 1.13B |
| Investing Cash Flow | -93.43M | -93.43M | -1.15B | -37.41M | 1.17B | -2.18B |
| Financing Cash Flow | -584.97M | -584.97M | -160.44M | -246.87M | -230.86M | 1.65B |
New Oriental Education Tech Technical Analysis
Neutral
55.85
Price Trends
54.12
Positive
51.43
Positive
49.71
Positive
Market Momentum
1.03
Positive
45.83
Neutral
19.72
Positive
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 55.85 is below the 20-day moving average (MA) of 57.57, above the 50-day MA of 54.12, and above the 200-day MA of 49.71, indicating a neutral trend. The MACD of 1.03 indicates Positive momentum. The RSI at 45.83 is Neutral, neither overbought nor oversold. The STOCH value of 19.72 is Positive, 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
UnderperformOutperform
Sector (62)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $9.65B | 24.44 | 9.28% | ― | 7.22% | -2.84% | |
75 Outperform | $7.09B | 40.95 | 4.77% | ― | 44.57% | 147.78% | |
70 Outperform | $3.12B | 11.10 | 23.04% | ― | 17.25% | 30.15% | |
68 Neutral | $5.19B | 22.41 | 30.77% | ― | 7.05% | -2.63% | |
65 Neutral | $1.24B | 39.30 | ― | ― | -1.66% | ― | |
62 Neutral | $20.33B | 14.63 | -3.31% | 3.23% | 1.93% | -12.26% | |
48 Neutral | $677.13M | ― | -32.95% | ― | 56.38% | -16.84% |
* Consumer Defensive Sector Average
EDU
New Oriental Education Tech
55.85
-4.45
-7.38%
LOPE
Grand Canyon Education
178.28
5.76
3.34%
LRN
Stride
70.62
-31.26
-30.68%
TAL
TAL Education Group
11.95
0.75
6.70%
GOTU
Gaotu Techedu
2.83
-0.17
-5.67%
DAO
Youdao
10.78
5.45
102.25%
New Oriental Education Tech Corporate Events
New Oriental Schedules Board Meeting to Approve Q1 Results
Oct 14, 2025
New Oriental Education & Technology Group Inc. announced that its board of directors will hold a meeting on October 27, 2025, to approve and publish the unaudited financial results for the quarter ended August 31, 2025. The results will be released on October 28, 2025, before the U.S. market opens, and a teleconference will be held on the same day for management to discuss the results and address any questions from stakeholders.
New Oriental Education Announces Record Date for Annual General Meeting
Sep 26, 2025
On September 26, 2025, New Oriental Education & Technology Group Inc. announced the record date for its forthcoming annual general meeting of shareholders. The record date is set for October 16, 2025, and shareholders must ensure their share transfers are lodged by this date to be eligible to attend. This announcement is significant as it outlines the procedural steps for shareholder participation in the company’s governance, which can impact strategic decisions and stakeholder engagement.
New Oriental Education Releases FY2025 Annual Report
Sep 25, 2025
New Oriental Education & Technology Group Inc. has published its annual report for the fiscal year ending May 31, 2025, detailing its audited financial results. This report, released on September 25, 2025, is made available to shareholders in accordance with the Hong Kong Stock Exchange’s regulations. The publication of the annual report provides insights into the company’s financial performance and strategic positioning, which are crucial for stakeholders to assess the company’s future prospects and market standing.
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.