Assessing Whether New Oriental Education & Technology Group Inc. (NYSE: EDU) Is Over- Or Undervalued

Goldman Sachs & Co. LLC has recently announced that it has increased stake in New Oriental Education & Technology Group Inc. (NYSE:EDU) by 51.19%. After grabbing 2.83 million shares, the institutional investor is now in possession of 0.96 million shares of the Consumer Defensive Company. The new investment brought the stake of investor firm to 1.66% having worth around $128.94 million. Moreover, Fidelity Management & Research Co increased its share by 2.8 million to have a control over 2.8 million shares. And Bank of America, NA raised its holdings to 0.41 million shares by acquiring 2.76 million shares or 1.62% of the stake.

New Oriental Education & Technology Group Inc. (EDU) concluded trading on 05/24/23 at a closing price of $37.40, with 2.64 million shares of worth about $98.67 million changed hands on the day. Half year performance of the stock remained positive as price took a surge of 37.91% during that period and on Wednesday the price saw a loss of about -0.72%. Currently the company’s common shares owned by public are about 169.70M shares, out of which, 166.44M shares are available for trading.

A deeper look into what the analysts at Wall Street are thinking about the price target of this stock provides us with the following: 15 analysts are covering the EDU stock and their offered price forecasts bring an average price target of $55.10. Over the next 12 months, analysts forecasted that the stock’s price could jump as high as $70.00 and could fall to a lowest price of $38.00. The stock’s current price level is 29.84% above of average price target set by the analysts, while a rise to estimated low would result in gain of 1.58% for the stock. However, touching the estimated high of $70.00 would mean a gain of 46.57% for the stock.

R Valor, Fidelity Inv. Trust – Emerging Ma, and ACAP Strategic Fund are the top 3 mutual funds which are holding stakes in New Oriental Education & Technology Group Inc. R Valor is currently holding 1.27 million shares of worth totaling $57.8 million. The company recently came buying 0.0 shares which brought its stake up to 0.75% of the company’s outstanding shares. Fidelity Inv. Trust – Emerging Ma bought 0.52 million shares, after which its hold over company’s outstanding shares expand to 0.73%, leaving 1.25 million shares with the mutual fund that have a worth of about $56.82 million. ACAP Strategic Fund, after selling 0.95 million shares, have now control over 0.56% of the stake in the company. It holds -0.98 million shares of worth $43.09 million.

New Oriental Education & Technology Group Inc. (NYSE: EDU) started trading at $36.84, below -$0.83 from concluding price of the previous day. However, the stock later moved at a day high price of 37.88, or with a loss of -0.72%. Stock saw a price change of -1.37% in past 5 days and over the past one month there was a price change of -13.33%. Year-to-date (YTD), EDU shares are showing a performance of 7.41% which increased to 211.67% when we look at its performance for past 12 months. Over the period of past 52 weeks, stock dropped to lowest price of $10.71 but also hit the highest price of $46.74 during that period. The average intraday trading volume for New Oriental Education & Technology Group Inc. shares is 1.85 million. The stock is currently trading -7.81% below its 20-day simple moving average (SMA20), while that difference is down -5.41% for SMA50 and it goes to 11.25% higher than SMA200.

Goldman Sachs & Co. LLC acquired 2.83 million shares of New Oriental Education & Technology Group Inc. having value of about $128.94 million. Data submitted at the U.S SEC by Goldman Sachs & Co. LLC revealed that the firm now holds 0.96 million shares in the company valued at close to $35811622.0, or have control over 51.19% stake in the company. New Oriental Education & Technology Group Inc. (NYSE: EDU) currently have 169.70M outstanding shares and institutions hold larger chunk of about 55.60% of that. Holding of mutual funds in the company is about 30.53% while other institutional holders and individual stake holders have control over 7.52% and — of the stake respectively.

The stock has a current market capitalization of $6.25B and its 3Y-monthly beta is at 0.62. It has posted earnings per share of -$0.20 in the same period. It has Quick Ratio of 2.40 while making debt-to-equity ratio of 0.00. Volatility of a stock is a metric used to know how much the price of that stock is under influence and for EDU, volatility over the week remained 3.11% while standing at 3.85% over the month.

Analysts are in expectations that New Oriental Education & Technology Group Inc. (EDU) stock would likely to be making an EPS of $0.2 in the current quarter, while forecast for next quarter EPS is $0.8 and it is $2.21 for next year. For the current quarter EPS, analysts have given the company a lowest target $0.07 which is $0.34 at the higher side of the target for the same. When we compare those targets with actual EPS, we find that company posted an EPS of -$0.94 in the same quarter a year ago. Stock’s fiscal year EPS is expected to drop by -445.90% while it is estimated to increase by 41.70% in next year. EPS is likely to grow at an annualized rate of 14.81% for next 5-years, compared to annual growth of -19.20% made by the stock over the past 5-years.

Analysts at 15 brokerage firms have issued recommendations for the New Oriental Education & Technology Group Inc. (EDU)’s stock and average of those rates the stock at a “Strong Buy” and assign it a score of 1.60. Out of those 15 Wall Street analysts, 11 recommended a “Buy” rating, while 1 were in favor recommending the stock as a “Hold” and 0 analyst recommended the stock as “Sell”.