Head-To-Head Survey: New Oriental (EDU) vs. Its Peers

New Oriental (NYSE: EDU) is one of 42 public companies in the “Educational services” industry, but how does it contrast to its competitors? We will compare New Oriental to similar companies based on the strength of its valuation, dividends, institutional ownership, profitability, earnings, analyst recommendations and risk.

Institutional and Insider Ownership

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79.7% of New Oriental shares are owned by institutional investors. Comparatively, 53.7% of shares of all “Educational services” companies are owned by institutional investors. 23.7% of shares of all “Educational services” companies are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares New Oriental and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
New Oriental 13.92% 16.19% 9.37%
New Oriental Competitors -14.47% -23.11% -6.46%

Analyst Ratings

This is a breakdown of recent recommendations and price targets for New Oriental and its competitors, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
New Oriental 0 1 8 0 2.89
New Oriental Competitors 132 606 693 12 2.41

New Oriental currently has a consensus target price of $100.54, indicating a potential upside of 9.96%. As a group, “Educational services” companies have a potential upside of 5.11%. Given New Oriental’s stronger consensus rating and higher possible upside, equities research analysts plainly believe New Oriental is more favorable than its competitors.

Risk and Volatility

New Oriental has a beta of 1.32, suggesting that its share price is 32% more volatile than the S&P 500. Comparatively, New Oriental’s competitors have a beta of 0.81, suggesting that their average share price is 19% less volatile than the S&P 500.

Valuation & Earnings

This table compares New Oriental and its competitors revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
New Oriental $1.80 billion $274.45 million 52.55
New Oriental Competitors $515.82 million $30.04 million 17.94

New Oriental has higher revenue and earnings than its competitors. New Oriental is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Summary

New Oriental beats its competitors on 11 of the 13 factors compared.

New Oriental Company Profile

New Oriental Education & Technology Group Inc. provides private educational services under the New Oriental brand in the People's Republic of China. The company operates through Language Training and Test Preparation, Primary and Secondary School Education, Online Education, Content Development and Distribution, Pre-School Education, Overseas Study Consulting Services, and Study Tour segments. It offers test preparation courses to students taking language and entrance exams used by educational institutions in the United States, the People's Republic of China, and the Commonwealth countries; and after-school tutoring courses for middle and high school students to achieve better scores on entrance exams for admission into high schools or higher education institutions, as well as for children to teach English. The company also provides language training courses consisting of English, as well as other foreign languages, such as German, Japanese, French, Korean, Italian, and Spanish; operates full-time private primary and secondary boarding school in Yangzhou seeking a full curriculum taught in Chinese and English; develops and edits educational materials for language training and test preparation comprising books, software, CD-ROMs, magazines, and other periodicals; and offers online education programs on its Websites koolearn.com and koo.cn. In addition, it offers overseas studies consulting; pre-school education; and a pilot program that permits third parties in small cities to provide its English and kindergarten programs, as well as overseas study tour services. As of May 31, 2017, the company offered educational programs, services, and products to students through a network of 77 schools, 855 learning centers, and 20 bookstores. The company was founded in 1993 and is headquartered in Beijing, the People's Republic of China.

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