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Earnings Miss: New Oriental Education & Technology Group Inc. Missed EPS By 11% And Analysts Are Revising Their Forecasts

Last week, you might have seen that New Oriental Education & Technology Group Inc. (NYSE:EDU) released its third-quarter result to the market. The early response was not positive, with shares down 2.0% to US$83.26 in the past week. New Oriental Education & Technology Group beat revenue forecasts by a solid 11% to hit US$1.2b. Statutory earnings per share fell 11% short of expectations, at US$0.52. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for New Oriental Education & Technology Group

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Taking into account the latest results, the consensus forecast from New Oriental Education & Technology Group's 24 analysts is for revenues of US$5.34b in 2025. This reflects a major 32% improvement in revenue compared to the last 12 months. Per-share earnings are expected to jump 59% to US$2.99. Before this earnings report, the analysts had been forecasting revenues of US$5.10b and earnings per share (EPS) of US$3.47 in 2025. While next year's revenue estimates increased, there was also a substantial drop in EPS expectations, suggesting the consensus has a bit of a mixed view of these results.

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The consensus price target was unchanged at US$96.08, suggesting the business is performing roughly in line with expectations, despite some adjustments to profit and revenue forecasts. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values New Oriental Education & Technology Group at US$113 per share, while the most bearish prices it at US$51.00. This is a fairly broad spread of estimates, suggesting that analysts are forecasting a wide range of possible outcomes for the business.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. One thing stands out from these estimates, which is that New Oriental Education & Technology Group is forecast to grow faster in the future than it has in the past, with revenues expected to display 25% annualised growth until the end of 2025. If achieved, this would be a much better result than the 0.6% annual decline over the past five years. Compare this against analyst estimates for the broader industry, which suggest that (in aggregate) industry revenues are expected to grow 11% annually. Not only are New Oriental Education & Technology Group's revenues expected to improve, it seems that the analysts are also expecting it to grow faster than the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for New Oriental Education & Technology Group. Pleasantly, they also upgraded their revenue estimates, and their forecasts suggest the business is expected to grow faster than the wider industry. The consensus price target held steady at US$96.08, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on New Oriental Education & Technology Group. Long-term earnings power is much more important than next year's profits. We have forecasts for New Oriental Education & Technology Group going out to 2026, and you can see them free on our platform here.

You can also see our analysis of New Oriental Education & Technology Group's Board and CEO remuneration and experience, and whether company insiders have been buying stock.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.