Unfortunately, investing is risky – companies can and do go bankrupt. But if you pick the right business to buy shares in, you can make more than you can lose. For example, the New Oriental Education & Technology Group Inc. (NYSE:EDU) share price had more than doubled in just one year – up 115%. It’s also up 25% in about a month. This could be related to the recent financial results that were recently released – you could check the most recent data by reading our company report. On the other hand, longer term shareholders have had a tougher run, with the stock falling 51% in three years.

Let’s take a look at the underlying fundamentals over the longer term, and see if they’ve been consistent with shareholders returns.

See our latest analysis for New Oriental Education & Technology Group

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One way to examine how market sentiment has changed over time is to look at the interaction between a company’s share price and its earnings per share (EPS).

New Oriental Education & Technology Group went from making a loss to reporting a profit, in the last year.

When a company is just on the edge of profitability it can be well worth considering other metrics in order to more precisely gauge growth (and therefore understand share price movements).

We think that the revenue growth of 42% could have some investors interested. Many businesses do go through a phase where they have to forgo some profits to drive business development, and sometimes its for the best.

The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).

earnings-and-revenue-growth
NYSE:EDU Earnings and Revenue Growth February 20th 2024

New Oriental Education & Technology Group is well known by investors, and plenty of clever analysts have tried to predict the future profit levels. You can see what analysts are predicting for New Oriental Education & Technology Group in this interactive graph of future profit estimates.

A Different Perspective

It’s nice to see that New Oriental Education & Technology Group shareholders have received a total shareholder return of 115% over the last year. That gain is better than the annual TSR over five years, which is 1.8%. Therefore it seems like sentiment around the company has been positive lately. In the best case scenario, this may hint at some real business momentum, implying that now could be a great time to delve deeper. Before forming an opinion on New Oriental Education & Technology Group you might want to consider these 3 valuation metrics.

If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges.

Valuation is complex, but we’re helping make it simple.

Find out whether New Oriental Education & Technology Group is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the Free Analysis

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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