New Oriental Education & Technology Group Inc. Just Missed Earnings - But Analysts Have Updated Their Models

New Oriental Education & Technology Group Inc. (NYSE:EDU) shareholders are probably feeling a little disappointed, since its shares fell 8.3% to US$79.64 in the week after its latest quarterly results. New Oriental Education & Technology Group beat revenue forecasts by a solid 11% to hit US$1.2b. Statutory earnings per share fell 11% short of expectations, at US$0.52. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for New Oriental Education & Technology Group

After the latest results, the 23 analysts covering New Oriental Education & Technology Group are now predicting revenues of US$5.32b in 2025. If met, this would reflect a major 32% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to shoot up 73% to US$3.25. In the lead-up to this report, the analysts had been modelling revenues of US$5.10b and earnings per share (EPS) of US$3.47 in 2025. So it's pretty clear consensus is mixed on New Oriental Education & Technology Group after the latest results; whilethe analysts lifted revenue numbers, they also administered a small dip in per-share earnings expectations.

There's been no major changes to the price target of US$96.23, suggesting that the impact of higher forecast revenue and lower earnings won't result in a meaningful change to the business' valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values New Oriental Education & Technology Group at US$113 per share, while the most bearish prices it at US$51.00. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business.

Of course, another way to look at these forecasts is to place them into context against the industry itself. One thing stands out from these estimates, which is that New Oriental Education & Technology Group is forecast to grow faster in the future than it has in the past, with revenues expected to display 25% annualised growth until the end of 2025. If achieved, this would be a much better result than the 0.6% annual decline over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 11% per year. Not only are New Oriental Education & Technology Group's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for New Oriental Education & Technology Group. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have forecasts for New Oriental Education & Technology Group going out to 2026, and you can see them free on our platform here.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.