Yahoo Finance Should You Think About Buying New Oriental Education & Technology Group Inc (NYSE:EDU) Now?
New Oriental Education & Technology Group Inc (NYSE:EDU), which is in the consumer services business, and is based in China, saw a double-digit share price rise of over 10% in the past couple of months on the NYSE. As a mid-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, what if the stock is still a bargain? Let’s examine New Oriental Education & Technology Group’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.
View our latest analysis for New Oriental Education & Technology Group
What is New Oriental Education & Technology Group worth?
According to my valuation model, New Oriental Education & Technology Group seems to be fairly priced at around 6.6% below my intrinsic value, which means if you buy New Oriental Education & Technology Group today, you’d be paying a fair price for it. And if you believe the company’s true value is $64.21, then there isn’t much room for the share price grow beyond what it’s currently trading. Is there another opportunity to buy low in the future? Since New Oriental Education & Technology Group’s share price is quite volatile, we could potentially see it sink lower (or rise higher) in the future, giving us another chance to buy. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.
What kind of growth will New Oriental Education & Technology Group generate?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company’s future expectations. With profit expected to grow by 94% over the next couple of years, the future seems bright for New Oriental Education & Technology Group. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.
What this means for you:
Are you a shareholder? It seems like the market has already priced in EDU’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the track record of its management team. Have these factors changed since the last time you looked at the stock? Will you have enough conviction to buy should the price fluctuates below the true value?
Are you a potential investor? If you’ve been keeping an eye on EDU, now may not be the most optimal time to buy, given it is trading around its fair value. However, the positive outlook is encouraging for the company, which means it’s worth diving deeper into other factors such as the strength of its balance sheet, in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on New Oriental Education & Technology Group. You can find everything you need to know about New Oriental Education & Technology Group in the latest infographic research report. If you are no longer interested in New Oriental Education & Technology Group, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.
