New Oriental Education & Technology Group Inc.
New Oriental Education & Technology Group Inc. Fundamental Analysis
New Oriental Education & Technology Group Inc. (EDU) shows moderate financial fundamentals with a PE ratio of 25.10, profit margin of 7.41%, and ROE of 10.04%. The company generates $5.1B in annual revenue with strong year-over-year growth of 13.60%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 62.0/100 based on profitability, valuation, growth, and balance sheet metrics. The C+ grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze EDU's fundamental strength across five key dimensions:
Efficiency Score
WeakEDU struggles to generate sufficient returns from assets.
Valuation Score
WeakEDU trades at a premium to fair value.
Growth Score
ExcellentEDU delivers strong and consistent growth momentum.
Financial Health Score
ExcellentEDU maintains a strong and stable balance sheet.
Profitability Score
WeakEDU struggles to sustain strong margins.
Key Financial Metrics
Is EDU Expensive or Cheap?
P/E Ratio
EDU trades at 25.10 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, EDU's PEG of 5.77 indicates potential overvaluation.
Price to Book
The market values New Oriental Education & Technology Group Inc. at 2.46 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 15.48 times EBITDA. This signals the market has high growth expectations.
How Well Does EDU Make Money?
Net Profit Margin
For every $100 in sales, New Oriental Education & Technology Group Inc. keeps $7.41 as profit after all expenses.
Operating Margin
Core operations generate 9.60 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $10.04 in profit for every $100 of shareholder equity.
ROA
New Oriental Education & Technology Group Inc. generates $4.60 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
New Oriental Education & Technology Group Inc. produces operating cash flow of $905.75M, showing steady but balanced cash generation.
Free Cash Flow
New Oriental Education & Technology Group Inc. generates strong free cash flow of $737.28M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $4.64 in free cash annually.
FCF Yield
EDU converts 7.72% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
25.10
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
5.77
vs 25 benchmark
P/B Ratio
Price to book value ratio
2.46
vs 25 benchmark
P/S Ratio
Price to sales ratio
1.86
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.20
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.57
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.10
vs 25 benchmark
ROA
Return on assets percentage
0.05
vs 25 benchmark
ROCE
Return on capital employed
0.10
vs 25 benchmark
How EDU Stacks Against Its Sector Peers
| Metric | EDU Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 25.10 | 23.25 | Neutral |
| ROE | 10.04% | 1240.00% | Weak |
| Net Margin | 7.41% | -9728.00% (disorted) | Weak |
| Debt/Equity | 0.20 | 0.77 | Strong (Low Leverage) |
| Current Ratio | 1.57 | 2.54 | Neutral |
| ROA | 4.60% | -203388.00% (disorted) | Weak |
EDU outperforms its industry in 1 out of 6 key metrics, but lagging in ROE.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews New Oriental Education & Technology Group Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
33.93%
Industry Style: Defensive, Dividend, Low Volatility
High GrowthEPS CAGR
-11.86%
Industry Style: Defensive, Dividend, Low Volatility
DecliningFCF CAGR
9.02%
Industry Style: Defensive, Dividend, Low Volatility
Growing