EDUNew Oriental Education & Technology Group Inc.
Is the business good?
The checks split: earnings fully cash-backed (2.2×), but margins compressing.
Operating profit is fully backed by cash. Conversion is worsening vs a year ago.
Operating margin has narrowed over the past few years, profitability per dollar of sales is eroding.
A balanced mix of margins, efficiency, and leverage. ROE 12% = margin × turnover × leverage.
Unless marked, from derived.
Where this answer is blind. The F-score rewards improvement, so an already-elite company can score mid-pack.
How good a business is EDU?
New Oriental Education & Technology Group Inc. earns 23% on the capital it employs against a 9.0% cost of capital, so the business is worth more the bigger it gets.
Return on invested capital · cost of capital 9.0% · 14 points above what the capital costs: growth creates value
- Operating margin
- 11%
Operating margin · Education & Training Services median 13% · fiscal year to FY2026
- Cash conversion
- 2.18×
Cash conversion · 2.88× a year ago · operating cash flow covers the operating profit after tax
- Share count, year on year
- −2.2%
Share count, year on year · bought back, each share owns more of the company
| Year | Operating margin |
|---|---|
| FY2021 | 2.7% |
| FY2022 | −32% |
| FY2023 | 6.3% |
| FY2024 | 8.1% |
| FY2025 | 8.7% |
| FY2026 | 11% |
Details›
- Gross marginfiscal year to FY2026
- 55%
- Operating marginfiscal year to FY2026
- 11%
- Net marginfiscal year to FY2026
- 8.4%
- Free cash flow margin
- 14%
- Revenue, trailing twelve months
- $5.66B
- Free cash flow, trailing twelve months
- $780M
- Net income, trailing twelve months
- $475M
- Return on invested capitaloperating profit after tax ÷ debt + equity − cash
- 23%
Margins, capital and share counts from the statements as filed with the SEC; cash conversion is operating cash flow over operating profit after tax.
Education & Training Services
Ranks #8 of 15 by RyuScore