New Oriental Education P/E Ratio Compared to Competitors: A Comprehensive Analysis

New Oriental Education Inc. EDU shares are trading at $48.06 after a 0.90% increase. The stock has a lower P/E ratio than the Diversified Consumer Services industry, which could indicate that the stock is undervalued. However, investors should consider other financial ratios, industry trends, and qualitative factors when making investment decisions.

New Oriental Education Inc. (EDU) shares are trading at $48.06 after a 0.90% increase in the current session. Over the past month, the stock has shown a 2.97% gain, but it has fallen by 26.43% in the past year [2]. This mixed performance raises questions about the stock's valuation and future prospects.

The stock's P/E ratio of 25.01 [2] is lower than the industry average of 30.01 for the Diversified Consumer Services sector. This could suggest that EDU is undervalued, as a lower P/E ratio might indicate that investors do not expect the stock to perform better in the future. However, a low P/E ratio can also indicate weak growth prospects or financial instability.

Investors should consider other financial ratios, industry trends, and qualitative factors when evaluating EDU. For instance, the company's revenue and earnings have shown consistent growth. In 2025, EDU's revenue was $4.90 billion, an increase of 13.60% compared to the previous year's $4.31 billion, with earnings of $371.72 million, an increase of 20.07% [1].

Analysts also provide mixed views. While the average rating for EDU stock is "Hold" [1], the 12-month stock price target is $51.6, indicating a potential upside of 10.47% [1]. However, some analysts have downgraded their ratings due to concerns about management's outlook and cash distributions [2].

In conclusion, while EDU's lower P/E ratio might suggest undervaluation, investors should consider other factors before making investment decisions. A comprehensive analysis of financial ratios, industry trends, and qualitative factors is crucial.

References:
[1] https://stockanalysis.com/stocks/edu/
[2] https://www.benzinga.com/insights/news/25/08/47308687/price-over-earnings-overview-new-oriental-education