Yahoo Finance Earnings Beat: New Oriental Education & Technology Group Inc. Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models
New Oriental Education & Technology Group Inc. (NYSE:EDU) just released its first-quarter report and things are looking bullish. It was overall a positive result, with revenues beating expectations by 3.3% to hit US$986m. New Oriental Education & Technology Group reported statutory earnings per share (EPS) US$1.09, which was a notable 18% above what the analysts had forecast. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Check out our latest analysis for New Oriental Education & Technology Group
After the latest results, the 26 analysts covering New Oriental Education & Technology Group are now predicting revenues of US$4.20b in 2021. If met, this would reflect a major 20% improvement in sales compared to the last 12 months. Statutory earnings per share are predicted to jump 36% to US$3.24. Before this earnings report, the analysts had been forecasting revenues of US$4.12b and earnings per share (EPS) of US$3.16 in 2021. So the consensus seems to have become somewhat more optimistic on New Oriental Education & Technology Group's earnings potential following these results.
The consensus price target rose 11% to US$186, suggesting that higher earnings estimates flow through to the stock's valuation as well. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on New Oriental Education & Technology Group, with the most bullish analyst valuing it at US$200 and the most bearish at US$145 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.
Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. We can infer from the latest estimates that forecasts expect a continuation of New Oriental Education & Technology Group'shistorical trends, as next year's 20% revenue growth is roughly in line with 22% annual revenue growth over the past five years. Juxtapose this against our data, which suggests that other companies (with analyst coverage) in the industry are forecast to see their revenues grow 22% per year. It's clear that while New Oriental Education & Technology Group's revenue growth is expected to continue on its current trajectory, it's only expected to grow in line with the industry itself.
The Bottom Line
The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around New Oriental Education & Technology Group's earnings potential next year. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for New Oriental Education & Technology Group going out to 2025, and you can see them free on our platform here.
Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.
This article by Simply Wall St is general in nature. 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.
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