New Oriental Education & Technology Group: Buy, Sell, or Hold?
StockNews
Published May 17, 2021 11:59AM ET
Updated May 17, 2021 12:30PM ET
New Oriental Education & Technology Group: Buy, Sell, or Hold?
Chinese private edtech company New Oriental Education & Technology (EDU) has seen its stock price tumble year-to-date. Although the company’s expansion strategies and differentiated online offerings could boost enrollment, China’s plans to crackdown on private tutoring companies could limit its growth prospects and cause further stock price retreats in the near term. Read ahead to learn more.Headquartered in Beijing, China, New Oriental Education & Technology Group Inc. (EDU) is a private educational services provider that offers K-12, online education and pre-school education programs. The company’s shares have gained only 1.7% over the past year. In fact, over the past month EDU’s shares plunged 16.9% because of growing investor concerns over China’s plans to clamp down on the private tutoring industry.
EDU closed yesterday’s trading session at $12.20, 38.9% below its $19.97 52-week high.
The K-12 tutoring industry is expected to grow to around 1 trillion yuan ($155 billion) in 2025, on the back of higher demand for private tutoring, test preparations and English fluency. Although this should bode well for EDU, increasing scrutiny from the Chinese government and looming industry challenges make its growth prospects uncertain.
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