Personal Finance
EDU

Why New Oriental Education Stock Popped Today

Asian student working on a laptop with rows of empty desks behind him

What happened

Shares of New Oriental Education (NYSE: EDU) jumped as much as 18% early Tuesday, then settled to trade up 5.6% as of 1:30 p.m. EDT after the Chinese private educational services company announced strong fiscal second-quarter 2019 results.

More specifically, New Oriental Education's quarterly revenue climbed 27.8% year over year -- or 33.6% computed in Chinese renminbi -- to $597.1 million. That translated to adjusted net income of $23 million, or $0.14 per share, up 68.4% from $0.09 per share in the same year-ago period. Analysts, on average, were only expecting adjusted earnings of a penny per share on revenue closer to $578 million.

Asian student working on a laptop with rows of empty desks behind him

IMAGE SOURCE: GETTY IMAGES.

So what

New Oriental education added 185 schools and learning centers over the past year, including 24 learning centers and one new training school this quarter, bringing its total to 1,125 at the end of November. The company also saw total student enrollments climb 23.6% year over year to roughly 2,320,800.

"As we execute our well-proven 'Optimize the Market' strategy, we continued to progress our capacity expansion plan in this quarter," stated New Oriental CEO Chenggang Zhou. "[...] At the same time, we continued to refine and leverage our online and offline integrated standardized teaching system for the K-12 business across the nation, and particularly in some of the larger cities for our overseas test preparation business."

Now what

For the current third quarter of fiscal 2019, New Oriental Education expects revenue in the range of $769.9 million to $793.2 million -- good for year-over-year growth of 25% to 28% and well above the $755.8 million most analysts were modeling. In the end, combined with New Oriental's relative outperformance to end the first half of the year, this outlook gave the market more than enough reason to bid up shares today.

10 stocks we like better than New Oriental Education & Technology Group

When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor , has quadrupled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and New Oriental Education & Technology Group wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of November 14, 2018

Steve Symington has no position in any of the stocks mentioned. The Motley Fool recommends New Oriental Education & Technology Group. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

EDU

Other Topics

Stocks

The Motley Fool

Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

Learn More