Are Investors Undervaluing New Oriental Education & Technology Group (EDU) Right Now?

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

New Oriental Education & Technology Group (EDU) is a stock many investors are watching right now. EDU is currently sporting a Zacks Rank #1 (Strong Buy), as well as a Value grade of A.

Another notable valuation metric for EDU is its P/B ratio of 2.23. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. EDU's current P/B looks attractive when compared to its industry's average P/B of 3.58. Within the past 52 weeks, EDU's P/B has been as high as 3.23 and as low as 1.76, with a median of 2.15.

Finally, our model also underscores that EDU has a P/CF ratio of 17.37. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. EDU's current P/CF looks attractive when compared to its industry's average P/CF of 29.75. EDU's P/CF has been as high as 26.93 and as low as 13.44, with a median of 16.54, all within the past year.

These are only a few of the key metrics included in New Oriental Education & Technology Group's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, EDU looks like an impressive value stock at the moment.

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New Oriental Education & Technology Group, Inc. (EDU): Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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