Today we're going to take a closer look at Mid-Cap Real Estate company New Oriental Education & Technology, whose shares are currently trading at $57.2. We've been asking ourselves whether the company is under or over valued at today's prices... let's perform a brief value analysis to find out!
an Increase in Expected Earnings Improves Its Value Outlook but Trades Above Its Graham Number:
New Oriental Education & Technology Group Inc. engages in the provision of private educational services under the New Oriental brand in the People's Republic of China. The company belongs to the Real Estate sector, which has an average price to earnings (P/E) ratio of 27.31 and an average price to book (P/B) ratio of 1.94. In contrast, New Oriental Education & Technology has a trailing 12 month P/E ratio of 24.9 and a P/B ratio of 2.47.
New Oriental Education & Technology has moved -16.4% over the last year compared to 13.8% for the S&P 500 — a difference of -30.3%. New Oriental Education & Technology has a 52 week high of $68.53 and a 52 week low of $40.66.
Summary of the Company's Finances:
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $3,096 | $3,579 | $4,277 | $3,105 | $2,998 | $4,314 |
| Operating Margins | 10% | 11% | 3% | -32% | 6% | 8% |
| Net Margins | 8% | 12% | 8% | -38% | 6% | 7% |
| Net Income (M) | $238 | $413 | $334 | -$1,188 | $177 | $310 |
| Net Interest Expense (M) | $2 | $5 | $7 | $4 | $1 | $0 |
| Depreciation & Amort. (M) | $110 | $146 | $226 | $192 | $117 | $101 |
| Diluted Shares (M) | 159 | 160 | 1,652 | 1,696 | 1,686 | 1,669 |
| Earnings Per Share | $1.5 | $2.59 | $0.2 | -$0.7 | $0.11 | $0.18 |
| EPS Growth | n/a | 72.67% | -92.28% | -450.0% | 115.71% | 63.64% |
| Free Cash Flow (M) | $537 | $495 | $701 | -$1,431 | $828 | $873 |
| CAPEX (M) | $269 | $310 | $429 | $151 | $143 | $249 |
| Total Debt (M) | $96 | $118 | $298 | $65 | $15 | $14 |
| Net Debt / EBITDA | -3.17 | -1.46 | -3.83 | 1.37 | -5.37 | -3.05 |
| Current Ratio | 1.73 | 1.52 | 1.89 | 2.62 | 1.96 | 1.8 |
New Oriental Education & Technology has generally positive cash flows and growing revenues and a flat capital expenditure trend. Additionally, the company's financial statements display a decent current ratio of 1.8 and healthy leverage levels. However, the firm suffers from weak operating margins with a negative growth trend and declining EPS growth.
