New Oriental (NYSE:EDU): Assessing Valuation After Strong Q4 Growth, AI Expansion, and Shareholder Return Plan

New Oriental Education & Technology Group (NYSE:EDU) caught investor attention this week after announcing a strong revenue increase for the fourth quarter, supported by rising demand in overseas test preparation and tourism offerings.

See our latest analysis for New Oriental Education & Technology Group.

After a year marked by ambitious product launches and a new shareholder return plan, New Oriental’s recent momentum is catching up. Its share price rose 13.6% over the past 90 days, even as the 1-year total shareholder return is still down 18.5% following last year’s turbulence. Longer-term, three-year total shareholder return remains firmly positive, highlighting the company’s recovery story and renewed focus on growth opportunities.

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With the recent rally and robust fundamentals, the key question remains: is New Oriental still undervalued, or is the market already pricing in the company’s next phase of growth and innovation?

Most Popular Narrative: 1.2% Undervalued

New Oriental’s most widely held valuation narrative pegs its fair value just above the last close, suggesting the market remains cautious but optimistic about future earnings expansion. The small gap hints at balanced expectations around profitability and capital returns, putting the spotlight on what is powering this narrative.

“Aggressive share repurchases and the introduction of a three-year capital return plan committing at least 50% of net income to buybacks and dividends provide a direct and ongoing catalyst for EPS growth and shareholder value creation, especially when combined with rising profitability.”

Read the complete narrative.

Curious what bold assumptions about top-line growth and stronger margins are hidden just beneath the surface? The real driver of this fair value is not just headline revenue—it is high-conviction forecasts about profitability and shareholder rewards. Which future expectations are swaying analyst consensus? Uncover the formula fueling this outlook.

Result: Fair Value of $57.53 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, intensifying competition and regulatory changes may still challenge New Oriental’s growth story. This could put pressure on both margins and long-term earnings potential.

Find out about the key risks to this New Oriental Education & Technology Group narrative.

Build Your Own New Oriental Education & Technology Group Narrative

If you see things differently or want to dig into the numbers yourself, you can build your own take on New Oriental’s outlook. Start yours in just minutes with Do it your way.

A good starting point is our analysis highlighting 3 key rewards investors are optimistic about regarding New Oriental Education & Technology Group.

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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.

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