| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 82.05 | 36 |
| Intrinsic value (DCF) | 64.42 | 7 |
| Graham-Dodd Method | 24.74 | -59 |
| Graham Formula | 48.61 | -19 |
New Oriental Education & Technology Group Inc. (NYSE: EDU) is a leading provider of private educational services in China, operating under the well-established New Oriental brand. Founded in 1993 and headquartered in Beijing, the company specializes in K-12 after-school tutoring (AST), test preparation, language training, and online education. EDU serves students preparing for domestic and international exams, including English proficiency tests like TOEFL and IELTS, as well as college entrance exams. The company also offers overseas study consulting and study tours. With a network of 122 schools, 1,547 learning centers, and 11 bookstores as of May 2021, EDU leverages both physical and digital platforms to deliver its services. The company’s diversified offerings—spanning test prep, language courses, and full-time private schooling—position it as a key player in China’s education sector, which remains resilient due to strong demand for supplementary education despite regulatory challenges. EDU’s focus on quality content and omnichannel delivery enhances its competitive edge in the post-regulatory reform landscape.
New Oriental Education (EDU) presents a mixed investment case. On the positive side, the company has demonstrated resilience post-China’s 2021 regulatory crackdown on for-profit tutoring, pivoting toward non-academic and overseas-focused education services. Its strong brand recognition, diversified revenue streams (including online education and consulting), and healthy cash position ($1.39B) provide stability. However, risks persist, including regulatory uncertainty, reduced margins due to business model adjustments, and slower growth in its core K-12 segment. The stock’s low beta (0.245) suggests lower volatility relative to the market, but investors should weigh EDU’s recovery potential against ongoing sector headwinds. The dividend yield (~1.5% based on the $0.58/share payout) adds modest income appeal.
New Oriental Education’s competitive advantage lies in its strong brand equity, extensive physical footprint, and hybrid (online + offline) delivery model. As one of China’s earliest private education providers, EDU benefits from long-standing trust among students and parents, particularly in test prep and language training. Its shift toward non-academic services (e.g., study tours, STEAM education) post-regulatory crackdown differentiates it from peers still reliant on traditional tutoring. However, EDU faces intense competition from agile online platforms like Gaotu Techedu and TAL Education’s adaptive learning tech. While EDU’s capital reserves allow for strategic pivots, its larger physical infrastructure could be a cost drag compared to digital-first rivals. The company’s overseas consulting segment provides a niche edge, but growth depends on post-pandemic demand recovery. EDU’s competitive positioning is further challenged by the rise of AI-driven education tools, where it lags behind some tech-savvy competitors. Its ability to leverage existing customer relationships while innovating in permissible service areas will be critical to maintaining market share.