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New Oriental Education & Technology Group Inc ADR EDU

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Stock XNYS Rating as of
$75.18 −1.37 (1.79%)
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Company Report

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New Oriental's Capacity Expansion Accelerates

Cheng Wang

After terminating its K-9 academic tutoring in 2021, New Oriental identified a few new business initiatives, such as nonacademic tutoring and intelligent learning systems and devices. We are positive on these initiatives given New Oriental’s expertise in after-school tutoring and curriculum development. The new businesses accounted for only about 17% of revenue in fiscal 2023 but growth is robust. We project a 27% revenue contribution by fiscal 2028.

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Price vs Fair Value

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EDU is trading within a range we consider fairly valued.
Price
$75.18
Fair Value
$43.00
Uncertainty
Very High
1-Star Price
$855.30
5-Star Price
$36.00
Economic Moat
Rvrbs
Capital Allocation
Cgtrpmpv

Bulls Say, Bears Say

Bulls

The margin trend of New Oriental's new businesses is better than expected.

Bears

High school academic after-school tutoring as a for-profit business carries very high policy risk.

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News

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Trading Information

Previous Close Price
$76.55
Day Range
$74.73–76.90
52-Week Range
$36.22–98.20
Bid/Ask
$74.79 / $75.45
Market Cap
$12.44 Bil
Volume/Avg
1.3 Mil / 1.6 Mil

Key Statistics

Price/Earnings (Normalized)
31.92
Price/Sales
3.11
Dividend Yield (Trailing)
—
Dividend Yield (Forward)
—
Total Yield
—

Company Profile

New Oriental is a leading private education provider in China. K-9 academic after-school tutoring used to account for 50%-60% of New Oriental’s revenue before the regulatory crackdown in 2021. After terminating its K-9 academic after-school tutoring business, New Oriental has identified a few new initiatives such as nonacademic tutoring and intelligent learning systems and devices. The remaining businesses include high school academic after-school tutoring and overseas-related test preparation and consulting business. The company also owns 55% of East Buy, a market leader in livestreaming e-commerce.
Sector
Consumer Defensive
Industry
Education & Training Services
Stock Style Box
Large Growth
Total Number of Employees
50,438
Website
https://www.neworiental.org

Competitors

Valuation

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Metric
EDU
TAL
00839
Price/Earnings (Normalized)
 31.9251.685.58
Price/Book Value
 3.211.800.71
Price/Sales
 3.114.471.77
Price/Cash Flow
 8.2254.033.98
Price/Earnings
EDU
TAL
00839

Financial Strength

Metric
EDU
TAL
00839
Quick Ratio
 1.753.130.76
Current Ratio
 1.953.420.85
Interest Coverage
 ——4.16
Quick Ratio
EDU
TAL
00839

Profitability

Metric
EDU
TAL
00839
Return on Assets (Normalized)
 5.09%0.41%5.49%
Return on Equity (Normalized)
 9.10%0.53%12.83%
Return on Invested Capital (Normalized)
 7.63%−1.70%8.69%
Return on Assets
EDU
TAL
00839
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YgnfzrwmvWkjf$2.7 Bil
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VkmlwzywxByzw$2.4 Bil
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