New Oriental Education & Technology Group Inc. (EDU) Stock Analysis
New Oriental Education & Technology Group Inc.
▾ What's in the 41/100 risk score? (higher = riskier)
Contributions (weight × component score) sum to the total. This near-term score now includes fundamental health (leverage, FCF trend). It excludes the the Altman Z score, whose retained-earnings input this filer does not report separately, which relies on a proxied (estimated) input. See the Financial Health section for the full balance-sheet read.
How to read EDU
We are not publishing an intrinsic value for this one — the section below says exactly why. Everything on this page that comes straight from the filings and the tape is still here; treat the missing valuation as a known gap, not as a verdict on the business.
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Reported earnings & margins ↓
What the company actually reported — unaffected by the valuation being held.
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Balance sheet & book value ↓
Assets, liabilities and equity as filed.
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Who's selling & betting against it ↓
Insider and short-interest behaviour needs no valuation model.
The share count we read for EDU looks wrong — common for multi-class / founder-controlled filers that report shares per share-class. That makes per-share figures (including intrinsic value) misleading, so we suppressed them. The company's total financials below are sound.
What to use instead: Lean on the totals — revenue, net income, cash flow — and the balance sheet. Multi-class share counts are being corrected; once fixed, the per-share valuation returns automatically.
This note is only about the single DCF fair-value number — EDU's full financial statements, health scores, and written analysis are all below.
Quality & solvency checks
Cheap stocks can be cheap for a reason. These screens warn when a low valuation comes paired with structural fragility.
Why it matters: Cheap-looking stocks (low P/E or P/B) often have low Z-scores because the market knows the company is dying. Z-score warns you before you fall into a value trap.
Reference: > 3.0 = safe zone · 1.81–3.0 = grey zone · < 1.81 = distress zone
Full explanation →
We can't produce a trustworthy Altman Z here: retained earnings weren't separately reported in our data, so a core input would have to be fabricated. Rather than show a categorical "distress" verdict from an invented number, we mark it unavailable. Judge financial health from the leverage, cash position, and the measurable Piotroski checks instead.
▾ The checks — what passed, what didn't (and what we couldn't measure)
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✓ Positive net incomeNet income $371.7M in the latest year.
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✓ Positive operating cash flowOperating cash flow $896.6M (was $1,122.6M the prior year).
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✓ Cash flow backs up reported profitOperating cash flow $896.6M vs net income $371.7M.
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✓ Return on assets improvingReturn on assets 4.8% vs 4.1% a year ago.
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✓ Debt load (vs assets)Long-term debt is 0.0% of assets vs 0.0% a year ago ($0.0M now).
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✗ Short-term liquidity (current ratio)Current ratio 1.58x vs 1.80x a year ago.Why this matters: The current ratio compares assets it can turn to cash within a year against bills due within a year. Below 1.0 means it may struggle to cover near-term obligations.
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✓ Share count (dilution)Share count declined 2.3% (1,669.5M → 1,631.1M year-over-year), so the no-dilution check passed. (This 1-year change differs from the ~4%/yr multi-year buyback CAGR the DCF cites.)
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· Pricing power (gross margin) (n/a — data not reported; not scored)
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✓ Sales per asset (asset turnover)Asset turnover 0.63x vs 0.57x a year ago.
Missing data is never counted as a pass or a fail — it's shown as n/a and excluded from the denominator. Each check compares the company against its own prior year.
What if you assume different inputs?
Here's where we land — and what happens if you change the assumptions. Drag the sliders to set your own Discount RateDiscount Rate — The annual return you demand for taking single-stock risk instead of buying a safe Treasury or index fund.
Why it matters: Higher discount rate = stricter valuation (a stock has to produce more cash to be worth holding). Lower = more generous.
Reference: 8–12% is standard · 9–10% matches S&P 500 historical return · Below 7% is illogical for single-stock risk
Full explanation → (the annual return you demand for single-stock risk) and terminal growth; the value updates live so you can see whether the stock looks cheaper or richer. The discount rate starts at 10.0%, the figure our model used for EDU. Open Advanced to also change beta, growth and the rate path.
Note: no headline intrinsic value is published for this stock (the valuation is held for a data-quality reason — see the notes above). The calculator below is a what-if tool: the values it produces are your assumptions played out, not our estimate.
A full intrinsic value isn't shown for EDU because the valuation is currently held for a data-quality reason (see the guardrail notes above). The reverse-DCF reading still works — it needs only the price and cash flow — but we won't publish a forward value until the underlying data passes our checks.
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⚙ Advanced — tinker with every input (beta, growth, rate path, margin → full intrinsic value)
A standard discounted cash flowDCF — Discounted Cash Flow — sums up all future cash a business will produce, adjusted for the fact that future dollars are worth less than dollars today.
Why it matters: It is the most fundamentally honest valuation method when applicable — but only works for companies with predictable, positive cash flow.
Reference: Best for: mature, profitable businesses. Fails for: pre-profit growth, banks, REITs.
Full explanation → (DCF) valuation is not meaningful for EDU due to the model's reliance on trailing cash flows, which may understate its growth runway at the current scale. While the company has positive net income and operating cash flow, the market is likely focused on its revenue growth and potential for margin expansion beyond what historical data suggests. The primary quantifiable risk is its low franchise/durability score of 1/5, indicating potential competitive pressures or business model fragility.
As of 2 months ago
Anatomy of a share
What you're buying per share. Bars are at the same scale so you can see the relative size of revenue, costs, cash flow, and debt — not just read them in a table.
What's free cash flow / what do these mean?
Revenue per share — how much the business earns from customers, divided by the number of shares outstanding. Top of the income statement.
Earnings per share — profit left after operating costs, interest, and taxes, per share. Two versions appear on this page and are not interchangeable: GAAP diluted EPS uses the company's weighted-average diluted share count during the reporting period (this is the "earnings" in "price-to-earnings"); net income per current share divides annual net income by today's share count. They differ whenever the share count has changed.
Owner-earnings free cash flow per share — the cash the business produces for shareholders. Savng's owner-earnings FCF subtracts capital expenditures and stock-based compensation from operating cash flow (SBC is a real dilution cost even though it's non-cash). This is deliberately more conservative than "standard" FCF, which subtracts only capital expenditures — so our figure is lower than the headline FCF you'll see elsewhere. FCF funds dividends, buybacks, debt repayment, and acquisitions; a company can report positive earnings yet negative FCF.
Debt per share — total interest-bearing borrowings divided by shares. High debt-per-share next to thin FCF-per-share is a fragility signal.
What you actually need to decide
Every stock price is a disagreement. Here's the single thing that must go right for the bulls, the single thing that breaks the thesis, and the concrete signposts to watch so you can update your view as real results arrive.
Why it matters: Compare to current price. Below IV = potentially undervalued. Above IV = priced for growth that must actually happen.
Reference: Model-derived; quality depends on data and assumptions.
Full explanation →.
- Quarterly revenue growth rates
- Operating cash flow trends
- Announcements regarding new educational programs or market expansion
The trend, in plain numbers (2024 → 2025)
Straight from the financial statements — no model, no opinion. For a small or unprofitable company, the direction of these numbers usually tells you more than any single valuation.
- Revenue grew +14% to $4.90B.
- Net income grew +20% to $371.7M.
- Free cash flow fell to $594.7M.
Management & Leadership
Michael Minh Hong Yu is the founder, chairman, and CEO of New Oriental Education & Technology Group Inc., a position he has held since its inception. He has been instrumental in guiding the company through various market changes and regulatory environments. Louis T. Hsieh serves as the President and Chief Financial Officer.
What They Make
New Oriental Education & Technology Group Inc. provides educational services, including after-school tutoring, test preparation, and language training, primarily to students in China.
End Markets
Revenue Drivers
Why Is It Priced Like This?
Why Customers Pay
What we use instead: earnings (P/E, EV/EBIT), book value (P/B) — computed from the figures this company does report, shown in the sections below. Those numbers are unaffected by the missing cash-flow data.
The market is likely pricing EDU based on expectations for continued revenue growth, which has been 3.5% per year over the last four years, and its ability to maintain positive net income and operating cash flow. The market may be assigning value to the company's potential to expand its educational offerings or adapt to regulatory changes, which is not fully captured by a backward-looking cash flow model. The price is 9.4x the model's intrinsic valueIntrinsic Value — Our DCF model's estimate of what each share is mathematically worth based on projected cash flows.
Why it matters: Compare to current price. Below IV = potentially undervalued. Above IV = priced for growth that must actually happen.
Reference: Model-derived; quality depends on data and assumptions.
Full explanation →, suggesting investors anticipate future margin expansion or growth beyond the modeled 3.5%.
Business Model & Valuation
How They Make Money
The company funds itself primarily through its positive operating cash flow, which has been positive in 4 out of the last 5 years.
Growth / Revenue DCF
Extreme market premium (P/FCF 122x): market is pricing future growth far beyond current FCF. Using revenue/margin model.
Show advanced inputs
| RevenueGrowth | 3.5% |
What this model does NOT do: this is a consolidated owner-earnings FCF model. Standalone segment assumptions: none. It does not project its revenue segments independently; their combined effect is embedded in the historical revenue and cash-flow trend the model extrapolates. The calculator above can only approximate a segment's impact through the single consolidated growth rate — it cannot model any one line separately. For a true segment-level view, build a separate model from the company's segment disclosures.
Maturity & Competitive Position
Moat Signals
Revenue has been growing at 3.5% per year over the last four years, from $4277M to $4900M, and net income has been positive in 4 out of 5 years.
Geography & Markets
New Oriental Education & Technology Group Inc. primarily operates within China, with a significant presence across various cities. Exact geographic mix percentages are not available from current data sources.
Geographic Risks
Market Signals
These are timing signals, not value signals — they describe the stock's recent price behavior, not what the business is worth. Use them for the "the thesis looks good, but is now the moment?" question. Each tile below explains what it's saying.
Why it matters: Short-term contrarian indicator. Extreme readings often precede mean reversion, though not always.
Reference: 30–70 normal · >70 overbought · <30 oversold
Full explanation → (14)26.8OversoldHeavily sold off recently — sometimes a bounce setup, sometimes a falling knife.
Why it matters: When the fast line crosses above the slow line, short-term momentum is turning up; below, turning down. A timing cue, not a value signal.
Reference: Line above signal = bullish momentum · below = bearish
Full explanation →BearishLine below signalThe fast trend is below the slow trend — short-term momentum is currently downward.
Technicals describe price, not the business. A great company can have a "bearish" tape (a buying chance) and a weak one a "bullish" tape (a trap). Pair these with the valuation and health sections above.
QUALITY
Data Quality & Risk Flags (6 notes — click to expand/collapse)
Guardrail Notes (5)
- Revenue/margin projection model used - trailing FCF may understate growth runway at current scale.
- Terminal growth (3%) capped to 2.8% (80% of near-term growth 3.5%).
- Price is 9.4x model IV - market may be pricing optionality, narrative catalysts, or margin expansion beyond what trailing cash flows support.
- Extreme valuation (P/IV 9.4218x, IV $4.86 vs price $45.79); output dominated by data/units issue (often a multi-class share-count mismatch). Suppressed.
- DATA UNAVAILABLE: per-share values suppressed due to missing/unreliable shares data.
FINANCIALS
Financial Statements (5-year tables — click to expand)
From New Oriental Education & Technology Group Inc.'s SEC filings (EDGAR).
Income (5yr)
| Year | Revenue | Net Income | EPS |
|---|---|---|---|
| 2025 | 4.9B | 371.7M | $0.23 |
| 2024 | 4.3B | 309.6M | $0.19 |
| 2023 | 3.0B | 177.3M | $0.11 |
| 2022 | 3.1B | -1.2B | $-0.70 |
| 2021 | 4.3B | 334.4M | $0.20 |
Cash Flow (5yr)
| Year | Operating CF | CapEx | − SBC & adj. | Free Cash Flow |
|---|---|---|---|---|
| 2025 | 896.6M | 241.9M | 59.9M | 594.7M |
| 2024 | 1.1B | 249.4M | 122.5M | 750.8M |
| 2023 | 971.0M | 143.0M | 89.8M | 738.2M |
| 2022 | -1.3B | 150.7M | 133.0M | -1.6B |
| 2021 | 1.1B | 429.2M | 68.9M | 632.0M |
How we define FCF: operating cash flow − capital expenditure − stock-based compensation (owner-earnings basis — SBC is a real cost to shareholders even though it's non-cash). Latest year: 896.6M − 241.9M − 59.9M (SBC & adj.) = 594.7M. This is the same owner-earnings FCF definition the valuation model uses, though the DCF's starting value is a projected from revenue × terminal margin, not this single year.
Balance Sheet
| Total Assets | 7.8B |
| Total Liabilities | 3.9B |
| Equity | 3.7B |