New Oriental Education & Technology Group Inc. (NYSE: EDU)

Sector: Consumer Defensive Industry: Education & Training Services CIK: 0001372920
Market Cap 9.35 Bn
P/B 2.41
P/E 24.58
P/S 1.82
ROIC (Qtr) 6.82
Div Yield % 0.00
Rev 1y % (Qtr) 14.71
Total Debt (Qtr) 779.85 Mn
Debt/Equity (Qtr) 0.20
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About

New Oriental Education & Technology Group Inc., popularly known by its stock symbol EDU, is a leading provider of private educational services in China. The company's operations span across a wide range of educational programs, services, and products, making it a key player in the industry. New Oriental's primary business activities revolve around the provision of educational services, which it delivers through a combination of offline and online channels. Its offline services are offered through a nationwide physical network of schools, learning...

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Investment thesis

Bull case

  • Strong operating cash flow of 915.87M provides robust 1.17x coverage of total debt 779.85M, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 2.01B provide 7.66x coverage of short-term debt 262.06M, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of 915.87M provides exceptional 2944.92x coverage of interest expenses 311000, showing strong debt service capability.
  • Operating cash flow of 915.87M provides exceptional 37.73x coverage of minority interest expenses 24.28M, showing strong core operations.
  • Strong tangible asset base of 8.18B provides 10.49x coverage of total debt 779.85M, indicating robust asset backing and low credit risk.

Bear case

  • Operating cash flow of 915.87M barely covers its investment activities of (182.69M), with a coverage ratio of -5.01, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 915.87M provides insufficient coverage of deferred revenue obligations of 2.16B, which is 0.42x, raising concerns about future service delivery capabilities.
  • Tax assets of 80.49M provide limited offset against tax liabilities of 211.29M, which is 0.38x, indicating potential future cash flow pressure from tax obligations.
  • Short-term investments of 3.09B represent 1.52x of working capital 2.03B, suggesting potentially excessive financial asset allocation versus operational needs.
  • Short-term investments of 3.09B exceed receivables of 57.80M by 53.54x, indicating potentially inefficient capital allocation given collection cycle needs.

Consolidated And Non-Consolidated Breakdown of Revenue (2025)

Segments Breakdown of Revenue (2025)

Peer comparison

Companies in the Education & Training Services
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 EDU New Oriental Education & Technology Group Inc. 9.35 Bn 24.58 1.82 0.78 Bn
2 TAL TAL Education Group 6.18 Bn 22.22 2.20 0.38 Bn
3 GHC Graham Holdings Co 5.47 Bn 12.27 1.91 1.17 Bn
4 LAUR Laureate Education, Inc. 5.20 Bn 25.55 3.29 0.44 Bn
5 LOPE Grand Canyon Education, Inc. 4.62 Bn 21.85 4.23 0.11 Bn
6 LRN Stride, Inc. 3.61 Bn 11.32 1.43 0.56 Bn
7 ATGE Covista Inc. 3.46 Bn 13.66 1.83 0.73 Bn
8 PRDO PERDOCEO EDUCATION Corp 2.84 Bn 42.39 1.73 0.06 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.05 0.71
EV to Cash from Ops. EV/CFO 9.49 6.80
EV to Debt EV to Debt 11.14 11.15
EV to EBIT EV/EBIT 15.77 112.78
EV to EBITDA EV/EBITDA 15.14 6.48
EV to Free Cash Flow [EV/FCF] EV/FCF 13.23 5.57
EV to Market Cap EV to Market Cap 0.93 582,173.64
EV to Revenue EV/Rev 1.69 1.74
Price to Book Value [P/B] P/B 2.41 -3.80
Price to Earnings [P/E] P/E 24.58 -1.70
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Dividend Coverage Ratio 0.00 11.73
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 2.21
Dividend per Basic Share Div per Share (Qtr) 0.00 0.25
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 1.69
Interest Coverage Int. cover (Qtr) 1,771.59 53.05
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 8.49 -82.12
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 26.40 25.11
Dividend Growth (1y) % Div 1y % (Qtr) 0.00 0.54
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -2.80 -39.04
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 0.00 -34.79
EBIT Growth (1y) % EBIT 1y % (Qtr) 5.51 -40.70
EBT Growth (1y) % EBT 1y % (Qtr) 5.51 -52.53
EPS Growth (1y) % EPS 1y % (Qtr) 0.00 -29.51
FCF Growth (1y) % FCF 1y % (Qtr) -6.13 -36.51
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 11.59 -3.42
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.62 0.63
Cash Payout Ratio Cash Payout Ratio 0.00 0.01
Cash Ratio Cash Ratio (Qtr) 0.56 0.73
Current Ratio Curr Ratio (Qtr) 1.57 1.63
Debt to Equity Ratio Debt/Equity (Qtr) 0.20 3.83
Interest Cover Ratio Int Coverage (Qtr) 1,771.59 53.05
Times Interest Earned Times Interest Earned (Qtr) 1,771.59 53.05
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 0.00 -30.62
EBIT Margin % EBIT Margin % (Qtr) 10.72 -82.13
EBT Margin % EBT Margin % (Qtr) 10.71 -47.07
Gross Margin % Gross Margin % (Qtr) 55.30 50.48
Net Profit Margin % Net Margin % (Qtr) 7.40 -48.61