New Oriental Education & Technology Group Inc. - ADR
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Earnings Call Q4 2024
July 31, 2024 - AI Summary
Strong revenue growth but margin pressure from investment (FY2024 Q4 results)
- Net revenue grew +32.1% YoY (topline growth described as “healthy” recovery across key education lines).
- Operating margin: 0.9%; Non-GAAP operating margin: 3.2% (both down vs prior year per management tone).
- Key cost drivers YoY: operating costs/expenses +38.6% to $1,126.2m; cost of revenue +38.5% to $542.4m; SG&A and G&A also rose sharply.
- Negative/one-off/recurring mix (per management explanation): margin decline attributed mainly to (1) accelerated learning center capacity expansion, (2) new tourism business investment, (3) additional staff/management incentives in Q4, and (4) East Buy investments + certain costs related to Time with Yuhui (management implied some are one-time or front-loaded).
Margin outlook: improvement expected in Q1 2025, excluding East Buy; “education profitability” should normalize
- Management expects OP margin expansion of ~200 bps YoY in the first quarter of FY2025 for the company excluding East Buy.
- They believe the Q1 seasonality helps (Q1 is described as peak season for educational business).
- For the rest of FY2025 (Q2–Q4): management did not give specific bps targets, but stated confidence in full-year margin expansion for the education business, driven by operating leverage (utilization of expanded centers/hiring translating into revenue) and strong demand.
Capacity expansion plan (growth without necessarily “new city saturation”)
- They plan to increase capacity by ~20%–25% in FY2025.
- Most new openings are planned in existing cities (not a broad “new geography” push), focusing on cities with better topline and margin performance.
- Management stressed the objective is a balance of topline growth + margin expansion, and expects revenue to cover incremental classroom rental/cost as utilization improves.
- A specific enrollment vs capacity mismatch was discussed: learning centers expanded ~+42% YoY while non-academic tutoring enrollment grew ~+39% YoY—management said this is partly timing (student enrollment windows and rollout timing) and expected it to “bear fruit” into Q1.
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$56.50
8.4% upsideNew Oriental Education & Technology Group Target Price Details
Target Price by Analysts
8.4% upsideNew Oriental Education & Technology Group Target Price Details$157.51202.3% upside
Current Fair Value
202.3% upsideUndervalued by 202.3% based on the discounted cash flow analysis.
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Share Statistics
| Market cap | $8.07 Billion |
|---|---|
| Enterprise Value | $9.17 Billion |
| Annual dividend | $1.20 |
| Dividend yield | 2.45% |
| Earnings per Share | $3 |
| Beta | 0.23 |
| Outstanding Shares | 154,938,674 |
Return
| Return on Equity | 12.76% |
|---|---|
| Return on Assets | 5.79% |
| Return on Invested Capital | 14.75% |
Valuation & Multiples
| P/E Ratio | 14.87 |
|---|---|
| PEG | 111.89 |
| Price to Sales | 1.37 |
| Price to Book Ratio | 1.93 |
| Enterprise Value to Revenue | 1.52 |
| Enterprise Value to EBIT | 12.67 |
| Enterprise Value to Net Income | 18 |
| Total Debt to Enterprise | 0.34 |
| Debt to Equity | 0.78 |
Revenue Sources
No data
Last Earnings Call
Report Date
October 28, 2026
EPS Estimate
$1.81
Consensus analyst estimateRevenue Estimate
$1.85 B
Consensus analyst estimateNext Earnings Call
Expected Date
January 27, 2027
EPS Estimate
$0.54
Consensus analyst estimateRevenue Estimate
$1.51 B
Consensus analyst estimateInstitutional Put/Call Ratio
Compares institutional put options with call options. At 0.00, the ratio is below 1, so institutions hold more calls than puts.
| Put/Call Ratio | 0.0000▼ 6.06% |
|---|---|
| Total Calls | -▼ 100.00% |
| Total Puts | -▼ 100.00% |
Institutional Ownership
Holdings and activity of institutional investors.
| Ownership % | 1.73%▼ 29.17% |
|---|---|
| Total Invested | $149.57M▼ 93.36% |
| Investors Holding | 44▼ 133.00% |
About New Oriental Education & Technology Group Inc.
88,372 employees
CEO: Chenggang Zhou
New Oriental Education & Technology Group Inc. is a prominent provider of private educational services operating under the "New Oriental" brand across the People's Republic of China. Its operations are broadly organized into segments foc...