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At $91.12, Is New Oriental Education & Technology Group Inc (NYSE:EDU) A Buy?

Let’s talk about the popular New Oriental Education & Technology Group Inc (NYSE:EDU). The company’s shares saw a double-digit share price rise of over 10% in the past couple of months on the NYSE. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, could the stock still be trading at a relatively cheap price? Let’s take a look at New Oriental Education & Technology Group’s outlook and value based on the most recent financial data to see if the opportunity still exists. See our latest analysis for New Oriental Education & Technology Group

What’s the opportunity in New Oriental Education & Technology Group?

According to my valuation model, New Oriental Education & Technology Group seems to be fairly priced at around 16% above my intrinsic value, which means if you buy New Oriental Education & Technology Group today, you’d be paying a relatively reasonable price for it. And if you believe the company’s true value is $78.24, there’s only an insignificant downside when the price falls to its real value. So, is there another chance to buy low in the future? Given that New Oriental Education & Technology Group’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us an opportunity to buy later on. This is based on its high beta, which is a good indicator for share price volatility.

What kind of growth will New Oriental Education & Technology Group generate?

NYSE:EDU Future Profit Mar 23rd 18
NYSE:EDU Future Profit Mar 23rd 18

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. New Oriental Education & Technology Group’s earnings over the next few years are expected to increase by 83.64%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What this means for you:

Are you a shareholder? EDU’s optimistic future growth appears to have been factored into the current share price, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?

Are you a potential investor? If you’ve been keeping an eye on EDU, now may not be the most advantageous time to buy, given it is trading around its fair value. However, the optimistic prospect is encouraging for the company, which means it’s worth further examining other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.

Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on New Oriental Education & Technology Group. You can find everything you need to know about New Oriental Education & Technology Group in the latest infographic research report. If you are no longer interested in New Oriental Education & Technology Group, you can use our free platform to see my list of over 50 other stocks with a high growth potential.


To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned.

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