Key Highlights

  • EDU shares rose 2.41% pre-market to $59.99, up from a prior close of $58.58, extending Wednesday's 15.34% rally.
  • Fiscal Q4 total net revenue grew 23% year-over-year to $1,529.5 million, beating estimates by 4.46%, with non-GAAP operating income up 34.7% to $110 million.
  • Net income attributable to New Oriental surged 775.8% year-over-year to $62.2 million, despite $10-15 million in one-off restructuring costs.
  • Fiscal 2027 guidance calls for total net revenue of $6,453.9 million to $6,680.3 million, representing 14-18% year-over-year growth.

Broad-Based Growth Drives Fiscal Q4 Beat

New Oriental Education & Technology Group Inc. (NYSE:EDU) shares are extending gains in pre-market trading, adding to Wednesday's 15.34% surge after the company reported fiscal fourth-quarter total net revenue of $1,529.5 million, up 23% year-over-year and beating estimates by 4.46%. New Oriental, headquartered in Beijing and founded in 1993, is the largest provider of private educational services in China, offering programs spanning English and foreign language training, overseas and domestic test preparation, K-12 tutoring, and online education platforms under its renowned New Oriental brand.

Non-GAAP operating income rose 34.7% year-over-year to $110 million, with operating margin expanding 30 basis points despite $10 to $15 million in one-off restructuring costs, while net income attributable to New Oriental surged 775.8% year-over-year to $62.2 million. Growth was broad-based across segments, with overseas test prep revenue up 6%, overseas study consulting up 1%, and the adults and university students business up 29%.

Fiscal 2027 Guidance and Capital Allocation

New Oriental carries a market capitalization of approximately $9.29 billion, with shares trading at a trailing price-to-earnings ratio of 16.18 and a dividend yield of 2.05%. The stock's 52-week range spans $41.62 to $64.97.

New educational business initiatives, including the East Buy livestreaming e-commerce platform and new ventures such as the New Oriental Home platform, now operating in 69 pilot cities with roughly 950,000 registered families, contributed to growth, with new educational business initiatives revenue up 25% year-over-year. For fiscal 2027, the company guided total net revenue to a range of $6,453.9 million to $6,680.3 million, representing 14-18% year-over-year growth, with the K-12 business guided to grow approximately 20%.

The company plans fiscal 2027 capital expenditure of $250 million to $300 million, including a new headquarters build in Changping, alongside shareholder returns of approximately $300 million in cash dividends and a $200 million share repurchase program, part of a three-year shareholder return plan totaling approximately $500 million for fiscal 2027. Management also flagged approximately $100 million in cost savings achieved in fiscal 2026 through cost control initiatives, with a second phase involving increased AI adoption to further reduce staffing costs expected to drive additional savings next year.

Conclusion

New Oriental's continued gains reflect genuine strength across its core test-prep and tutoring businesses alongside accelerating contributions from newer initiatives like East Buy and New Oriental Home. With fiscal 2027 guidance calling for double-digit revenue growth and a substantial shareholder return program in place, investors will be watching whether the company can sustain this margin expansion as it scales its AI-driven cost initiatives.

This article is for informational purposes only and does not constitute investment advice. Readers should conduct their own research before making financial decisions.