NEW ORIENTAL EDUCATIO-SP ADR (NYSE:EDU) – A Potentially Undervalued Stock in Education Services

NEW ORIENTAL EDUCATIO-SP ADR (NYSE:EDU) was identified by our stock screener as a potential value opportunity. The company operates in China’s education sector, offering a mix of test preparation, language training, and livestreaming e-commerce services. Despite recent regulatory challenges in China’s private education industry, EDU’s fundamentals suggest it may be trading below its intrinsic value.

Valuation Highlights

• Attractive P/E Ratios: EDU trades at a forward P/E of 14.55, below both the industry average (21.06) and the S&P 500 (21.76).
• Strong Free Cash Flow: The company’s Debt-to-FCF ratio is just 0.02, indicating minimal debt relative to cash flow.
• Cheaper Than Peers: EDU is priced lower than 91.55% of its industry peers based on Price/Free Cash Flow.

Financial Health

• Solid Balance Sheet: With no debt (Debt/Equity of 0.00) and a current ratio of 1.66, EDU maintains a stable financial position.
• Improving Debt Metrics: The company has reduced its debt-to-assets ratio over the past year.

Profitability & Growth

• Healthy Margins: EDU’s gross margin stands at 55.03%, outperforming 70.42% of its competitors.
• Earnings Recovery: After a period of declining EPS, analysts expect 23.13% annual earnings growth in the coming years.
• Revenue Expansion: Revenue grew 18.73% YoY, with further growth of 10.19% expected annually.

Our Decent Value screener lists more stocks with similar value characteristics. For a deeper dive, review the full fundamental report on EDU.

Disclaimer

This is not investment advice. The observations here are based on data available at the time of writing, and market conditions may change. Always conduct your own research before making investment decisions.