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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:70Outperform
Price Target:
$58.00
▼(-1.53% Downside)
New Oriental Education Tech's strong financial performance and stable growth trajectory are significant positives, supported by robust revenue growth and profitability margins. However, technical indicators suggest bearish momentum, and valuation metrics indicate moderate attractiveness. The earnings call highlights a positive outlook but also points to challenges in overseas segments and increased operating costs.
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
$9.55B
Dividend Yield1.03%
Average Volume (3M)670.21K
Price to Earnings (P/E)25.7
Beta (1Y)0.66
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. Volume524,153
30 Day Avg. Volume670,205
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
$68.00Price Target Upside15.45% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
EPS Forecast (FY)3.3
Revenue Forecast (FY)$5.38B
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 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 28, 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 exhibits strong financial health with consistent revenue growth, robust profitability margins, and a solid balance sheet. The company's cash flow generation is impressive, supporting its operational and strategic initiatives. The low leverage and strong equity position mitigate financial risks, positioning the company well for future growth.Income Statement
New Oriental Education Tech has demonstrated strong revenue growth, with a 2.22% increase in the latest year. The gross profit margin is robust at 55.45%, indicating efficient cost management. Net profit margin improved to 7.60%, reflecting enhanced profitability. The EBIT and EBITDA margins are healthy at 9.97% and 12.15%, respectively, showcasing operational efficiency.Balance Sheet
The company's balance sheet is solid, with a low debt-to-equity ratio of 0.22, indicating conservative leverage. Return on equity is satisfactory at 10.17%, suggesting effective use of equity. The equity ratio stands at 46.91%, highlighting a strong equity base relative to total assets.Cash Flow
Cash flow performance is strong, with a 24.53% growth in free cash flow, indicating improved cash generation. The operating cash flow to net income ratio is 2.41, showing robust cash flow relative to earnings. The free cash flow to net income ratio is 0.71, reflecting efficient cash conversion.| 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 | 4.58B | 4.58B | 4.78B | 4.00B | 4.19B | 6.26B |
| Total Debt | 803.78M | 803.78M | 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
Positive
58.90
Price Trends
54.57
Positive
53.20
Positive
50.22
Positive
Market Momentum
1.01
Negative
67.68
Neutral
73.52
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 58.9 is above the 20-day moving average (MA) of 55.66, above the 50-day MA of 54.57, and above the 200-day MA of 50.22, indicating a bullish trend. The MACD of 1.01 indicates Negative momentum. The RSI at 67.68 is Neutral, neither overbought nor oversold. The STOCH value of 73.52 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 |
|---|---|---|---|---|---|---|---|
70 Outperform | $9.55B | 25.68 | 9.28% | 1.03% | 7.22% | -2.84% | |
70 Outperform | $3.04B | 10.68 | 23.04% | ― | 17.25% | 30.15% | |
67 Neutral | $6.76B | 38.62 | 4.77% | ― | 44.37% | 146.96% | |
62 Neutral | $20.33B | 14.63 | -3.31% | 3.23% | 1.93% | -12.26% | |
62 Neutral | $1.23B | -25.73 | -7.43% | ― | 8.10% | 43.35% | |
49 Neutral | $618.68M | -11.94 | -21.21% | ― | 48.81% | 61.64% | |
46 Neutral | $1.46B | 73.91 | ― | ― | -1.51% | 155.73% |
* Consumer Defensive Sector Average
EDU
New Oriental Education Tech
58.90
0.50
0.86%
LRN
Stride
69.23
-40.27
-36.78%
TAL
TAL Education Group
11.27
1.90
20.28%
GOTU
Gaotu Techedu
2.54
0.64
33.68%
DAO
Youdao
12.18
5.67
87.10%
COUR
Coursera
7.32
-0.99
-11.91%
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.
The most recent analyst rating on (EDU) stock is a Hold with a $54.00 price target. To see the full list of analyst forecasts on New Oriental Education Tech stock, see the EDU Stock Forecast page.
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.