New Oriental Education & Technology Group Inc. (EDU) expanding its growth trajectory ahead

New Oriental Education & Technology Group Inc. (NYSE: EDU) stock fell -0.09% on Monday to $44.15 against a previous-day closing price of $44.19. With 1.48 million shares changed hands, the volume of the stock remained lighter than its average volume of 2.93 million shares. During the session, the Education & Training Services company that operates in wider Consumer Defensive sector, reached to the highest price of $44.75 whereas the lowest price it dropped to was $43.50. The 52-week range on EDU shows that it touched its highest point at $46.63 and its lowest point at $8.40 during that stretch. It currently has a 1-year price target of $47.01. Beta for the stock currently stands at 0.55.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of EDU was up-trending over the past week, with a rise of 3.54%, but this was up by 16.46% over a month. Three-month performance surged to 94.15% while six-month performance rose 91.96%. The stock gained 159.71% in the past year, while it has gained 26.79% so far this year. A look at the trailing 12-month EPS for EDU yields -1.40 with Next year EPS estimates of 1.89. For the next quarter, that number is 0.31. This implies an EPS growth rate of -445.90% for this year and 64.30% for next year. EPS is expected to grow by 14.81% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of -19.20%.

Float and Shares Shorts:

At present, 169.70 million EDU shares are outstanding with a float of 166.44 million shares on hand for trading. On Oct 13, 2022, short shares totaled 7.21 million, which was 4.24% higher than short shares on Sep 14, 2022. In addition to Mr. Minhong Yu as the firm’s Founder & Exec. Chairman, Mr. Chenggang Zhou serves as its CEO & Director.

Institutional Ownership:

Through their ownership of 54.25% of EDU’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 33.85% of EDU, in contrast to 12.08% held by mutual funds. Shares owned by individuals account for –. As the largest shareholder in EDU with 4.52% of the stake, The Baupost Group LLC holds 7,685,706 shares worth 7,685,706. A second-largest stockholder of EDU, Goldman Sachs & Co. LLC, holds 5,411,717 shares, controlling over 3.19% of the firm’s shares. Renaissance Technologies LLC is the third largest shareholder in EDU, holding 4,116,746 shares or 2.42% stake. With a 2.23% stake in EDU, the Government Pension Fund – Global is the largest stakeholder. A total of 3,796,901 shares are owned by the mutual fund manager. The Carmignac Emergents, which owns about 1.22% of EDU stock, is the second-largest Mutual Fund holder. It holds 2,073,006 shares valued at 72.18 million. ACAP Strategic Fund holds 1.14% of the stake in EDU, owning 1,929,711 shares worth 67.19 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for EDU since 16 analysts follow the stock currently. There are 12 analysts who recommend BUY ratings, while 0 suggest SELL ratings. Of the remaining analysts, 2 believe that the stock is worth HOLDING, 2 give it an OVERWEIGHT rating, and 0 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With EDU analysts setting a high price target of $65.00 and a low target of $24.00, the average target price over the next 12 months is $47.63. Based on these targets, EDU could surge 47.23% to reach the target high and fall by -45.64% to reach the target low. Reaching the average price target will result in a growth of 7.88% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. EDU will report FY 2023 earnings on 07/25/2023. Analysts have provided yearly estimates in a range of $1.60 being high and $0.44 being low. For EDU, this leads to a yearly average estimate of $0.99. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. New Oriental Education & Technology Group Inc. surprised analysts by -$0.03 when it reported $0.01 EPS against a consensus estimate of $0.04. The surprise factor in the prior quarter was $0.32. Based on analyst estimates, the high estimate for the next quarter is $0.35 and the low estimate is $0.15. The average estimate for the next quarter is thus $0.25.

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