New Oriental Education & Technology Group Inc. Sponsored ADR representing 10 Ordinary Share (Cayman Islands) (EDU)

FairStock Score: 65/100 — STEADY

Key Financials

Strengths

• Generates $617 million in annual free cash flow (7.2% yield on market cap)
• Solid return on equity of 10.8% above cost of capital
• Conservative balance sheet with debt-to-equity of just 0.18, providing financial flexibility
• Revenue growth of 19.8% demonstrates strong top-line momentum
• Attractive 2.2% dividend yield providing steady income returns

AI Analysis

New Oriental Education & Technology Group Inc. Sponsored ADR representing 10 Ordinary Share (Cayman Islands) is a small-cap consumer defensive company valued at $8.6 billion. The business generates $5.4 billion in annual revenue with a 2.4% net margin and $617 million in free cash flow. From a quality standpoint, New shows Altman Z-Score of 1.9 in the grey zone and adequate 11% ROE. On valuation, the stock is reasonably priced at 19.1x earnings, with trades above its Graham Number with a negative 34% margin. Growth dynamics show revenue growing at 19.8% and profit growth of 45.3%. The 2.2% dividend yield adds an income component for patient holders. Our composite FairStock Score of 65/100 reflects above-average fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

New's 20% revenue growth trajectory could accelerate as it captures additional market share in the consumer defensive sector. With $617 million in annual free cash flow (7.2% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

Macro headwinds or sector-specific disruption could pressure margins, particularly if competitive intensity increases in the consumer defensive space. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer