New Oriental Education & Technology Group
The 10-second takeaway
For the quarter ended Feb. 28 (Q3), New Oriental Education & Technology Group met expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue grew significantly. Non-GAAP earnings per share grew significantly. GAAP earnings per share grew significantly.
Gross margins shrank, operating margins grew, net margins were steady.
New Oriental Education & Technology Group notched revenue of $218.5 million. The five analysts polled by S&P Capital IQ predicted a top line of $216.5 million on the same basis. GAAP reported sales were 25% higher than the prior-year quarter's $174.5 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.22. The three earnings estimates compiled by S&P Capital IQ predicted $0.16 per share. Non-GAAP EPS of $0.22 for Q3 were 22% higher than the prior-year quarter's $0.18 per share. GAAP EPS of $0.18 for Q3 were 29% higher than the prior-year quarter's $0.14 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 58.3%, 50 basis points worse than the prior-year quarter. Operating margin was 10.8%, 130 basis points better than the prior-year quarter. Net margin was 12.8%, much about the same as the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $239.8 million. On the bottom line, the average EPS estimate is $0.14.
Next year's average estimate for revenue is $962.0 million. The average EPS estimate is $0.91.
The stock has a one-star rating (out of five) at Motley Fool CAPS, with 715 members out of 856 rating the stock outperform, and 141 members rating it underperform. Among 186 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 128 give New Oriental Education & Technology Group a green thumbs-up, and 58 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on New Oriental Education & Technology Group is outperform, with an average price target of $20.77.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool recommends New Oriental Education. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.