1. New Oriental Education & Technology Group Inc. (NYSE:EDU)
Market Cap as of October 22: $10.93 billion
Number of Hedge Fund Holders: 37
New Oriental Education & Technology Group Inc. (NYSE:EDU) provides private educational services in China and offers a range of tutoring services, including K-12 education, English language training, and test preparation. It has taken steps to diversify its business, including expanding into online education and investing in technology.
The company demonstrated strong revenue growth in FQ4 2024, up 32.08% as compared to the year-ago period. The total revenue generated in the closing quarter was $1.14 billion. The company has projected a 31% to 34% year-over-year increase in revenue for its core education services business in FQ1 2025. The company also increased its share repurchase program from $400 million to $700 million, effective through May 31, 2025.
Full-year revenue increased by 43.9% year-over-year. This growth was primarily due to a significant increase in the number of schools and learning centers, which rose by 114 and 277, respectively. The total number of schools and learning centers reached 1025.
The company is focusing on new business areas like non-academic tutoring, intelligent learning systems and devices, study tours and research camps, educational materials and digitalized smart study solutions, and exam preparation courses for junior college diploma students, along with exploring opportunities in the culture and tourism market. The expansion into these new educational business initiatives contributed significantly to the 43% increase in revenue in 2024.
New Oriental Education & Technology Group Inc. (NYSE:EDU) leverages both a robust network of physical learning centers and schools alongside its innovative Koolearn.com platform, providing a diverse range of educational opportunities. This multi-channel approach ensures accessibility and caters to the evolving needs of students, positioning it for continued growth.
Ariel Global Fund made the following comment about New Oriental Education & Technology Group Inc. (NYSE:EDU) in its Q2 2023 investor letter:
“We added a new investment position inNew Oriental Education & Technology Group Inc. (NYSE:EDU), a leading after school tutoring program in China. Although the Chinese government banned K-12 academic after school tutoring, the company was able to leverage its expertise in course content quality control and standardized tutoring processes to quickly reposition itself as a leader of non-academic after school tutoring. Furthermore, we anticipate the company’s strong brand and the entrepreneurial acumen of its founder, Michael Yu, will create additional opportunities for expansion as a comprehensive educational service provider.”
While we acknowledge the growth potential of New Oriental Education & Technology Group Inc. (NYSE:EDU), our conviction lies in the belief that AI stocks hold great promise for delivering high returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than EDU but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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