Back to top

Bull of the Day

As a result of an excellent quarterly performance, estimates for this educational service provider have been on the uptrend sending the company to Zacks rank #1 (Strong Buy).

About the Company

Founded in 1993, New Oriental Education & Technology Group (EDU - Snapshot Report)is the largest provider of private educational services in China with over 15 million student enrollments. Headquartered in Beijing, EDU currently has a network of 57 schools, 733 learning centers, 32 bookstores and over 17,400 teachers in 50 cities. Additionally, it has a large online network with over 8.3 million users. 

Excellent Quarterly Results

The company reported its quarter ended February 28, 2013 results on April 24, 2013. Total net revenues increased by 28.6% while the net income increased by 25.0% year-over-year.

Diluted net income came in at $0.18 per ADS, substantially ahead of Zacks consensus estimate of $0.11 per ADS. Further, top-line growth was well above the management guidance range of 22% to 27% growth.

The company expects year-over-year revenue growth to be in the range of 20% to 25% for the quarter ended May 31, 2013.

Estimates Revisions

As a result of strong results, Zacks consensus estimate for the quarter ended May 31 now stands at $0.15 per share, up from $0.13 per share, 60 days ago. The consensus estimate for the current year is also up to $0.82 per share, from $0.74 per share earlier.
Share Repurchases and Dividend

In April, the board of directors authorized the repurchase of up to $50 million of the company's shares during the period from April 29, 2013, through July 31, 2013.

During the quarterly conference call, the management indicated a strong possibility of a dividend payout after their fourth quarter (ended May 31) results.

The Bottom Line

EDU has a recognized brand name and a leadership position in areas like overseas test prep and overseas study consulting and K-12 after school tutoring in China. Private education industry in China has been growing strongly.

Further, strong commitment to reducing costs and improving operational efficiency has been driving margins higher.  The company has also been closing its underperforming centers.

EDU is a Zacks Rank#1 (Strong Buy) stock. It also has a Zacks recommendation of “Outperform”.  Further, Zacks industry rank of 75 out of 265 also indicates a strong possibility of outperformance in the short term.

Want the latest recommendations from Zacks Investment Research? Today, you can download7 Best Stocks for the Next 30 Days.Click to get this free report >>

 

Please login to Zacks.com or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research

Close

Are you a new Zacks Member or a visitor to Zacks.com?

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
CENTURY ALU… CENX 22.50 +4.36%
PLANAR SYST… PLNR 4.32 +4.10%
ERBA DIAGNO… ERB 2.89 +3.58%
MALLINCKROD… MNK 71.61 +3.02%
GTT COMMUNI… GTT 12.00 +3.00%