New Oriental Education Tech (EDU) AI Stock Analysis

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New Oriental Education Tech

(NYSE:EDU)

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Rating:72Outperform

Price Target:$56.00▲(5.11% Upside)

Action:reiterated

Date:11/04/26

Overall score is driven primarily by improving financial performance (profitability recovery, healthy margins, and low leverage) and a strongly positive earnings outlook with reiterated FY2027 growth and expected margin expansion. These are partially offset by weak technicals (price below key moving averages with negative momentum) and cash-flow volatility, while valuation is supportive with a mid-teens P/E and ~2.38% dividend yield.

Positive Factors

Revenue and profit growthStrong revenue and operating-income growth indicate broadening demand and effective execution across the education portfolio. If sustained, this operating momentum can support investment in learning centers, digital platforms, and newer businesses while strengthening earnings capacity over the next several quarters.

Negative Factors

Volatile free cash flowThe sharp decline in free cash flow shows that earnings conversion has not been consistently stable, even though cash generation remains positive overall. Continued volatility could constrain internally funded expansion, make investment timing less predictable, and reduce flexibility during weaker operating periods.

New Oriental Education Tech (EDU) vs. SPDR S&P 500 ETF (SPY)

Market Cap: $8.26B
Dividend Yield: 2.25%
Average Volume (3M): 744.13K
Price to Earnings (P/E): 15.6
Beta (1Y): 0.53
Revenue Growth: 20.74%
EPS Growth: 41.78%
Country: US
Employees: 81,054
Sector: Consumer Defensive
Sector Strength: 62
Industry: Education & Training Services

New Oriental Education Tech Business Overview & Revenue Model

Company Description

New Oriental Education & Technology Group Inc. (EDU) operates as a prominent private education provider throughout the People's Republic of China, primarily recognized by its "New Oriental" brand. The company organizes its operations across key segme...

How the Company Makes Money

The company makes money primarily by charging customers for education services and selling education-related products. Key revenue streams historically included tuition and fees from in-person and online courses (such as language training, test prepa...

New Oriental Education Tech Earnings Call Summary

Earnings Call Date:Oct 28, 2026(Q1-2027)|% Change Since:-8.12%|Next Earnings Date:Jan 21, 2027

Earnings Call SentimentPositive

The call was strongly positive overall. Revenue exceeded the upper end of guidance, profitability increased, core education and East Buy margins expanded on a standalone basis, new initiatives delivered growth, East Buy and New Oriental Home showed strong momentum, and full-year guidance was reiterated. The main challenges were higher operating costs, stock-based compensation, stable rather than expanding consolidated margins due to business mix, overseas economic and international headwinds, and a temporary enrollment decline caused by timing differences.

Positive Updates

Revenue and Non-GAAP Operating Income Growth

Total net revenue grew 23.1% year over year to $1.87 thousand million, exceeding the upper range of prior guidance. Non-GAAP operating income rose 21.2% year over year to $406.8 million.

Negative Updates

Consolidated Operating Margin Remained Stable

Although core education and East Buy margins expanded, the consolidated operating margin remained broadly stable year over year because East Buy's rapid growth increased its share of group revenue and shifted the business mix. Management noted that core education margins are typically higher than East Buy's in the first quarter due to seasonality.

Company Guidance

For fiscal year 2027, New Oriental reiterated total net revenue guidance of $6.45 thousand million to $6.68 thousand million, representing a year over year increase in the range of 14% to 18%; management expects revenue growth in the coming Q2 to be higher than the revenue growth of the Q1, with overseas test-prep revenue growth over 5% year-over-year in dollar terms, new business revenue growth roughly high teens, or is that close to 20% or roughly 20%, high school business roughly 15% top-line growth year over year, college business around 20% or even maybe higher, and East Buy's revenue growth accelerated in Q2. Management expects margin expansion across all business lines in fiscal year 2027, plans to open 10% to 15% in the learning centers for the whole year, roughly 15% for the K-9 business, and expects the K-9 business, the new business, to grow somewhere around 20% year-over-year in the dollar terms; over the next 2 to 3 years, the plan is to drive the margin up step by step.

New Oriental Education Tech Financial Statement Overview

Summary

Fundamentals reflect a solid turnaround with strong profitability and healthy margins (TTM gross margin ~54%, net margin ~8.4%, EBIT margin ~12.1%) and modest leverage (debt-to-equity ~0.20). The main offset is cash-flow volatility, with TTM free cash flow down sharply versus the prior period and only moderate operating cash flow coverage of debt.

Income Statement

82Very Positive

Balance Sheet

78Positive

Cash Flow

67Positive

Financial statement breakdown
Breakdown	TTM	May 2026	May 2025	May 2024	May 2023	May 2022
Income Statement
Total Revenue	6.02B	5.68B	4.90B	4.31B	3.00B	3.11B
Gross Profit	3.27B	3.10B	2.72B	2.26B	1.59B	1.35B
EBITDA	736.09M	645.55M	634.44M	542.03M	424.84M	-834.02M
Net Income	507.78M	476.87M	372.44M	309.59M	177.34M	-1.19B
Balance Sheet
Total Assets	8.86B	8.79B	7.81B	7.53B	6.39B	6.03B
Cash, Cash Equivalents and Short-Term Investments	5.16B	5.29B	4.58B	4.78B	4.00B	4.19B
Total Debt	864.04M	848.83M	803.78M	662.33M	458.60M	680.41M
Total Liabilities	4.26B	4.47B	3.85B	3.48B	2.58B	2.24B
Stockholders Equity	4.24B	3.99B	3.66B	3.78B	3.60B	3.71B
Cash Flow
Free Cash Flow	772.85M	1.03B	637.38M	839.25M	827.96M	-1.43B
Operating Cash Flow	1.03B	1.03B	896.59M	1.12B	971.01M	-1.28B
Investing Cash Flow	-184.85M	-457.70M	-93.43M	-1.15B	-37.41M	1.17B
Financing Cash Flow	-518.40M	-380.15M	-584.97M	-160.44M	-246.87M	-230.86M

New Oriental Education Tech Technical Analysis

Technical Analysis SentimentNegative

Last Price53.28

Price Trends

50DMA55.81Negative

100DMA54.32Negative

200DMA53.78Negative

Market Momentum

MACD-1.08Negative

RSI45.64Neutral

STOCH64.30Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EDU, the sentiment is Negative. The current price of 53.28 is below the 20-day moving average (MA) of 54.46, below the 50-day MA of 55.81, and below the 200-day MA of 53.78, indicating a bearish trend. The MACD of -1.08 indicates Negative momentum. The RSI at 45.64 is Neutral, neither overbought nor oversold. The STOCH value of 64.30 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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

Overall Rating

UnderperformOutperform

Sector (62)

Financial Indicators

EDU against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
LRN	74Outperform	$3.17B	9.60	20.59%	―	2.48%	7.90%
TAL	73Outperform	$4.79B	2.55	19.00%	―	25.56%	350.25%
EDU	72Outperform	$7.35B	15.64	12.52%	2.25%	20.74%	41.78%
Sector *	62Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%
GOTU	61Neutral	$578.23M	-18.11	-26.92%	―	24.86%	48.69%
COUR	50Neutral	$901.75M	-4.62	-17.56%	―	44.35%	-154.13%
DAO	50Neutral	$2.31B	94.16	-8.24%	―	10.03%	-27.61%

* Consumer Defensive Sector Average

Performance Comparison

EDU and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
EDU	New Oriental Education & Technology	53.28	1.83	3.56%
LRN	Stride, Inc.	75.82	13.08	20.85%
TAL	TAL Education	10.28	-0.65	-5.95%
GOTU	Gaotu Techedu Inc.	2.48	0.05	2.06%
DAO	Youdao Inc Adr Class A	19.07	9.84	106.61%
COUR	Coursera Inc	3.51	-4.61	-56.77%

New Oriental Education Tech Corporate Events

New Oriental Schedules Board Meeting to Approve FY2027 Q1 Results and Earnings Call

Oct 13, 2026

New Oriental Education & Technology Group Inc. has scheduled a board meeting for October 27, 2026 to review and approve its unaudited financial results for the three months ended August 31, 2026. The company plans to publish these results before U.S....

New Oriental Publishes FY2026 Annual Report and Audited Results

Sep 22, 2026

New Oriental Education & Technology Group Inc. has released its annual report for the fiscal year ended May 31, 2026, fulfilling its obligations as a foreign private issuer under U.S. securities law and as a Hong Kong-listed company. The report, file...

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.

Date of analysis: Nov 04, 2026

New Oriental Education Tech AI Stock Analysis