New Oriental Education & Technology Group - Momentum
September 14 2011 - 8:00PM
Zacks
New Oriental Education & Technology Group (EDU) recently
spiked into a new multi-year high after reporting another great
quarter that included a 100% earnings surprise. With estimates on
the rise and a bullish growth projection, this Zacks #1 Rank stock
offers a lesson on momentum.
Company Description
New Oriental Education & Technology Group
provides private educational services primarily in the people's
Republic of China. The company was founded in 1993 and has a market
cap of $5.4 billion.
EDU has been bucking the weak market, recently
surging higher and jumping into a new multi-year high. The gains
come on the heels of strong Q4 results from July that came in well
ahead of expectations.
Fourth-Quarter Results
Revenue for the period was up 59% from last year to
$138 million. Earnings also looked great, coming in at 10 cents,
double the Zacks Consensus Estimate calling for 5 cents.
The good quarter was driven by an increase in
enrollments, with the number of students from last year climbing
12% to 489,000.
Financial Profile
New Oriental also has an awesome financial profile,
with cash and short-term investments up $198 million from last year
to $617 million against no long-term debt.
Estimates
We saw some decent movement in estimates off the
good quarter, with the current year adding 4 cents to 90 cents. The
next-year estimate also added 4 cents, climbing to $1.18, a bullish
32% growth projection.
Valuation
But in spite of the gains, the valuation picture
still looks reasonable, with a PEG ratio of 1.09 only marginally
higher than the benchmark of 1 for value.
12-Month Chart
On the chart, shares recently surged higher into a
new multi-year high. Look for support from the trend line on any
weakness. Take a look below.
Michael Vodicka is the Momentum Stock Strategist
for Zacks.com. He is also the Editor in charge of the Zacks
Momentum Trader Service.
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