NYSE:EDU

Stock Analysis Report

New Oriental Education & Technology Group

Executive Summary

New Oriental Education & Technology Group Inc.

Rewards

Trading at 34.2% below its fair value

Earnings are forecast to grow 28.99% per year

Earnings grew by 74.6% over the past year

Risk Analysis

No risks detected for EDU from our risk checks.


Snowflake Analysis

Exceptional growth potential with solid track record.


Similar Companies

Share Price & News

How has New Oriental Education & Technology Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: EDU has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-8.2%

EDU

-6.2%

US Consumer Services

-1.3%

US Market


1 Year Return

60.8%

EDU

26.5%

US Consumer Services

22.0%

US Market

Return vs Industry: EDU exceeded the US Consumer Services industry which returned 42% over the past year.

Return vs Market: EDU exceeded the US Market which returned 24.7% over the past year.


Shareholder returns

EDUIndustryMarket
7 Day-8.2%-6.2%-1.3%
30 Day-0.3%1.6%1.8%
90 Day3.1%8.5%9.3%
1 Year60.8%60.8%26.8%26.5%24.6%22.0%
3 Year156.7%155.3%113.5%103.4%49.2%39.6%
5 Year598.2%581.3%188.0%155.3%77.9%58.3%

Price Volatility Vs. Market

How volatile is New Oriental Education & Technology Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is New Oriental Education & Technology Group undervalued compared to its fair value and its price relative to the market?

44.1%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: EDU ($136.84) is trading below our estimate of fair value ($207.9)

Significantly Below Fair Value: EDU is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: EDU is poor value based on its PE Ratio (66.9x) compared to the Consumer Services industry average (28.6x).

PE vs Market: EDU is poor value based on its PE Ratio (66.9x) compared to the US market (18.9x).


Price to Earnings Growth Ratio

PEG Ratio: EDU is poor value based on its PEG Ratio (2.3x)


Price to Book Ratio

PB vs Industry: EDU is overvalued based on its PB Ratio (8.6x) compared to the US Consumer Services industry average (2.1x).


Next Steps

Future Growth

How is New Oriental Education & Technology Group forecast to perform in the next 1 to 3 years based on estimates from 26 analysts?

29.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: EDU's forecast earnings growth (29% per year) is above the savings rate (1.7%).

Earnings vs Market: EDU's earnings (29% per year) are forecast to grow faster than the US market (14.3% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: EDU's revenue (23.6% per year) is forecast to grow faster than the US market (7.5% per year).

High Growth Revenue: EDU's revenue (23.6% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: EDU's Return on Equity is forecast to be high in 3 years time (22%)


Next Steps

Past Performance

How has New Oriental Education & Technology Group performed over the past 5 years?

9.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: EDU has high quality earnings.

Growing Profit Margin: EDU's current net profit margins (11.5%) are higher than last year (8.3%).


Past Earnings Growth Analysis

Earnings Trend: EDU's earnings have grown by 7.7% per year over the past 5 years.

Accelerating Growth: EDU's earnings growth over the past year (24.1%) exceeds its 5-year average (7.7% per year).

Earnings vs Industry: EDU earnings growth over the past year (74.6%) exceeded the Consumer Services industry 24.1%.


Return on Equity

High ROE: EDU's Return on Equity (11.6%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is New Oriental Education & Technology Group's financial position?


Financial Position Analysis

Short Term Liabilities: EDU's short term assets ($3.6B) exceed its short term liabilities ($2.4B).

Long Term Liabilities: EDU's short term assets ($3.6B) exceed its long term liabilities ($983.7M).


Debt to Equity History and Analysis

Debt Level: EDU's debt to equity ratio (3.6%) is considered satisfactory.

Reducing Debt: Insufficient data to determine if EDU's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: EDU's debt is well covered by operating cash flow (846.2%).

Interest Coverage: EDU earns more interest than it pays, so coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: EDU has a high level of physical assets or inventory.

Debt Coverage by Assets: EDU's debt is covered by short term assets (assets are 38.2x debt).


Next Steps

Dividend

What is New Oriental Education & Technology Group's current dividend yield, its reliability and sustainability?

0.32%

Forecast Dividend Yield


Dividend Yield vs Market

company0%marketbottom25%1.4%markettop25%3.7%industryaverage1.4%forecastin3Years0.3%

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate EDU's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate EDU's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if EDU's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if EDU's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: EDU is not paying a notable dividend for the US market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of EDU's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

What is the CEO of New Oriental Education & Technology Group's salary, the management and board of directors tenure and is there insider trading?

4.8yrs

Average management tenure


CEO

Chenggang Zhou (57yo)

3.3yrs

Tenure

0

Mr. Chenggang Zhou has been the Chief Executive Officer of New Oriental Education & Technology Group Inc. since September 1, 2016 and served as its President since January 5, 2016 until January 20, 2017. M ...


Management Age and Tenure

4.8yrs

Average Tenure

55yo

Average Age

Experienced Management: EDU's management team is considered experienced (4.8 years average tenure).


Board Age and Tenure

13.1yrs

Average Tenure

55.5yo

Average Age

Experienced Board: EDU's board of directors are seasoned and experienced ( 13.1 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Louis Hsieh (55yo)

    Senior Adviser & Director

    • Tenure: 12.8yrs
  • Michael Yu (56yo)

    Founder & Executive Chairman

    • Tenure: 19yrs
  • Chenggang Zhou (57yo)

    CEO & Director

    • Tenure: 3.3yrs
  • Zhihui Yang (45yo)

    Chief Financial Officer

    • Tenure: 4.8yrs
  • Qiang Wu (46yo)

    Head of The Beijing School

    • Tenure: 5.5yrs
  • Sisi Zhao

    Investor Relations Director

    • Zheng Zhao

      Managing Partner


      Board Members

      • Robin Li (50yo)

        Independent Director

        • Tenure: 13.3yrs
      • Louis Hsieh (55yo)

        Senior Adviser & Director

        • Tenure: 12.8yrs
      • Denny Lee (52yo)

        Independent Director

        • Tenure: 13.3yrs
      • Michael Yu (56yo)

        Founder & Executive Chairman

        • Tenure: 19yrs
      • Chenggang Zhou (57yo)

        CEO & Director

        • Tenure: 3.3yrs
      • John Yang (64yo)

        Independent Director

        • Tenure: 12.3yrs

      Company Information

      New Oriental Education & Technology Group Inc.'s company bio, employee growth, exchange listings and data sources


      Key Information

      • Name: New Oriental Education & Technology Group Inc.
      • Ticker: EDU
      • Exchange: NYSE
      • Founded: 1993
      • Industry: Education Services
      • Sector: Consumer Services
      • Market Cap: US$20.439b
      • Shares outstanding: 158.43m
      • Website: https://www.neworiental.org

      Number of Employees


      Location

      • New Oriental Education & Technology Group Inc.
      • No.6 Haidian Zhongjie
      • Haidian District
      • Beijing
      • 100080
      • China

      Listings

      TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
      EDUNYSE (New York Stock Exchange)YesSPON ADRUSUSDSep 2006
      N1UDB (Deutsche Boerse AG)YesSPON ADRDEEURSep 2006
      EDU NBMV (Bolsa Mexicana de Valores)YesSPON ADRMXMXNSep 2006
      0K75LSE (London Stock Exchange)YesSPON ADRGBUSDSep 2006

      Biography

      New Oriental Education & Technology Group Inc. provides private educational services under the New Oriental brand in the People’s Republic of China. It operates through Language Training and Test Preparation Courses, 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 achieve better scores on entrance exams for admission into high schools or higher education institutions, 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 taught in Chinese and English; develops and edits educational materials for language training and test preparation comprising books, software, CD-ROMs, magazines, and other periodicals; and offers online education programs that include college, K-12, and pre-school education. In addition, the company offers overseas studies consulting; and a pilot program that permits third parties in small cities to provide its English and kindergarten programs, as well as overseas study tour services. As of May 31, 2019, it offered educational programs, services, and products to students through a network of 95 schools, 1,159 learning centers, and 15 bookstores. The company was founded in 1993 and is headquartered in Beijing, the People’s Republic of China. 


      Company Analysis and Financial Data Status

      All financial data provided by Standard & Poor's Capital IQ.
      DataLast Updated (UTC time)
      Company Analysis2020/01/25 00:24
      End of Day Share Price2020/01/24 00:00
      Earnings2019/11/30
      Annual Earnings2019/05/31


      Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.