--- title: "EDU: Study-Abroad Stumble, Enrichment Profits; Steadies Again" type: "Topics" locale: "en" url: "https://longbridge.com/en/topics/40101506.md" description: "$New Oriental EDU & Tech(EDU.US) released FY26 Q3 results pre-mkt on Apr 22 (Beijing time), covering part of the fall semester and the winter break from Dec 2025 to Feb 2026. Results and guidance were solid, but after the company's preview, Street estimates had already been revised up over the past month. By line item, East Buy is likely to come in better, while expectations for the core education biz look largely priced in by the market..." datetime: "2026-04-22T14:01:54.000Z" locales: - [en](https://longbridge.com/en/topics/40101506.md) - [zh-CN](https://longbridge.com/zh-CN/topics/40101506.md) - [zh-HK](https://longbridge.com/zh-HK/topics/40101506.md) author: "[Dolphin Research](https://longbridge.com/en/news/dolphin.md)" --- # EDU: Study-Abroad Stumble, Enrichment Profits; Steadies Again $New Oriental EDU & Tech(EDU.US) released its FQ3 2026 results pre‑mkt on Apr 22 Beijing time, covering part of the fall semester and the winter break from Dec 2025 to Feb 2026. Both the quarter and the outlook were decent, but street estimates had already been raised after the company preview. **Within segments, Oriental Selection likely outperformed, while core education looked fully anticipated by the market.** Operational highlights (education focus) follow. Key points are summarized below. **1) Guidance raised ‘as expected’:** The main highlight was the outlook. Management guided Q4 revenue growth of 15%-18% and lifted FY revenue to $5.6bn (+13%-14% YoY), up from last quarter’s +8%-12% range. However, this was largely priced in, so surprises were limited. **2) Study‑abroad still challenged:** The business continues to face Intl headwinds, with visa approvals for North America and the UK still falling early in the year, weighing on consulting. Test prep grew 7%, and some demand shifted to Australia and elsewhere. Overall, growth likely stayed flat to low single digits. **3) New biz remains the main driver:** Growth rebounded to 23%, continuing to lead core education. Management previously expressed confidence in sustaining a 15%-20% growth pace into FY27. **(1) Quality enrichment:** Since Q4 last year, license issuance for quality‑enrichment programs has slowed, suggesting marginal competition may have peaked, which benefits incumbents like New Oriental. Enrollments rebounded this quarter; looking across two consecutive quarters to smooth winter‑break timing effects, the trend shows a modest recovery. **(2) Learning devices:** Competition is intense and AI is exerting external pressure, with peers cutting prices to promote. Subscriber growth for New Oriental’s learning devices has slowed YoY, and we estimate ASPs are declining in line with the market. **4) Adult exams and high‑school academics:** Both maintained a steady ~15% growth trend, in line with market expectations. Momentum remains stable near term. **5) Integration boosts efficiency:** The company remains in a cost‑out cycle that began in FQ4 2025, and recent consolidation of the study‑abroad business (merging test‑prep and consulting teams) is lifting profitability. This mainly showed up in lower G&A, with the expense ratio down 200bps YoY, driving a 200bps YoY improvement in OP margin. **6) Steady shareholder returns:** Of the $300mn 12‑month buyback announced last Oct, about half has been completed and will likely be fully utilized by expiry at the current pace. The $190mn dividend is being paid in two tranches as planned. Against a $8.9bn mkt cap at yesterday’s close, shareholder yield is ~5.5%, upper‑mid among China ADRs. As of end‑Feb, net cash was $4.96bn. Excluding deferred revenue (mostly pre‑paid tuition), we estimate truly deployable net cash at $3.1bn. With stable operations and annual FCF of ~$700mn–$800mn, New Oriental has ample capacity to sustain shareholder returns. **7) Key financial metrics at a glance:** **Dolphin Research View** This print was steady with limited surprises vs. expectations. Part of the growth benefited from RMB appreciation, and **ex‑FX, trends are more muted,** especially given the low base last year that makes delivery easier. That said, the Q4 revenue guide (+15%–18%) looks healthy even ex‑FX on a sequential basis, despite a rebounding base. Given the lack of sustained improvement in the Intl environment and rising volatility YTD, this implies solid underlying resilience. At the same time, continued supply moderation in quality‑enrichment helps ease marginal competition, supporting margin improvement through the ongoing cost‑out cycle. **The brand franchise underpins management’s confidence in FY27 growth for study‑abroad and K12 new businesses, even with their usual prudence.** With shareholder returns progressing as planned, near‑term downside looks limited, while upside hinges on reduced Intl volatility, especially any tailwinds from head‑of‑state diplomacy. **On a mid‑ to long‑term view, we stay cautious given AI and shrinking youth cohorts.** These headwinds could also weigh on the valuation midpoint. As of Apr 21, 2026 U.S. close, New Oriental’s mkt cap was $8.9bn; on FY27, P/E is ~15x (implying 2027 revenue growth of 13%, OPM of 12%, and a 20% tax rate), **reasonable for the current backdrop.** If sector noise and market sentiment keep improving, combining near‑term growth with sector multiples, **a neutral‑to‑optimistic 16x–18x P/E implies another 10%–20% upside. But timing matters, as pressure likely builds the further out we go.** Over a 2‑year+ horizon, the impaired thesis could cap further upside optionality, and once earnings are visibly hit, multiples may compress further. ![图片包含 应用程序描述已自动生成](https://pub.pbkrs.com/cms/2026/0/CmK9nJsGnscdBRLjTt6iUxUEvVMyyThL.jpg?x-oss-process=style/lg) **Detailed Review** **1\. Expectations moved up early; guidance was neutral** From Dec to Feb, New Oriental delivered revenue of $1.42bn, up 20% YoY, with an FX tailwind of about 6‑7ppt. **The company did not disclose organic growth; using quarter‑end FX as a rough proxy,** the FX tailwind was ~6‑7ppt. Revenue topped the high end of guidance but broadly matched the latest top‑tier institutional estimates. For the outlook, management guided next‑quarter revenue of $1.43bn–$1.47bn (+15%–18% YoY), implying full‑year revenue of roughly $5.6bn. Versus already‑raised expectations, there was not much incremental surprise. Some segment details were shared on the call, and others in small‑group meetings. We provide a provisional split below and will update exact figures in the comments. **1) Study‑abroad under pressure:** Overall study‑abroad likely grew ~flat, with test prep up 7.4% but consulting probably declined. The Intl backdrop did not ease early in the year; visa approvals for North America and the UK, the two key destinations, fell sharply. Alternative destinations like Australia saw some substitution, but not enough to fill the gap. Even so, New Oriental’s brand strength still showed through in resilience, which could be the biggest source of upside vs. consensus. The market remains cautious on study‑abroad, expecting no recovery and flat to low declines over the next few years. **2) Adult English:** Growth was 14.5% vs. 13% last quarter. Ex‑FX (est.), organic growth was flat QoQ, suggesting steady near‑term performance, while mid‑/long‑term AI impact bears watching. **3) New businesses:** Growth rebounded to 23% with FX support, in line with expectations. Management previously expressed confidence in 15%–20% growth into FY27. By sub‑segment, quality enrichment benefited from slowing marginal supply, with enrollments improving (stripping spring‑break effects and looking across two consecutive quarters, the last three quarters have been roughly stable); learning devices face fierce competition and AI pressure, with peers (e.g., TAL) cutting prices to promote. **4) High‑school academics:** (Est.) ~15% growth, steady near term. Demographics and AI may weigh over the mid‑ to long term. **2\. Profitability kept improving** This quarter continued the group‑wide cost‑out cycle (from FQ4 2025 through FQ4 2026, targeting $100mn in total savings), aiming to improve margins YoY despite top‑line pressure. Execution remains on track with a focus on operating leverage. Business integration (merging study‑abroad test prep and consulting) continued to optimize G&A, with the ratio down 200bps YoY, lifting OPM by 220bps YoY. Ex‑SBC, non‑GAAP OPM also rose by 240bps. **Dolphin 'New Oriental' archive (last 12 months):** **Earnings** Jan 28, 2026: '[New Oriental (Trans): Share gain with a focus on high‑quality growth](https://longbridge.cn/topics/38189963?channel=SH000001&invite-code=355628&app_id=longbridge&utm_source=longbridge_app_share&locale=zh-CN&share_track_id=b68ca370-d059-489d-a3f2-41c22dd4e1b3)' Jan 28, 2026: '[New Oriental: Resilient growth; franchise quality keeps rising](https://longbridge.cn/topics/38181546?channel=SH000001&invite-code=355628&app_id=longbridge&utm_source=longbridge_app_share&locale=zh-CN&share_track_id=67d012a0-bebd-40fd-9265-dc48d50be3d1)' Oct 28, 2025: '[New Oriental (Trans): High dividends and buybacks to continue next year](https://longbridge.cn/zh-CN/topics/35698538?invite-code=032064)' Oct 28, 2025: '[Guidance steady, returns maxed — can the faith in New Oriental be restored?](https://longbridge.cn/zh-CN/topics/35685233?invite-code=032064)' **Deep Dive** Apr 4, 2023: '[Cash moat deepens — Dong Yuhui cannot define New Oriental](https://longportapp.com/zh-CN/topics/4773012?invite-code=)' Jan 13, 2023: '[With a Spring Festival Gala boost, can New Oriental’s future still rely on education?](https://longportapp.com/topics/3858551?invite-code=032064)' **Hot Takes** Jul 26, 2024: '[Dong Yuhui’s departure drags New Oriental — who is the real bagholder?](https://longportapp.com/zh-CN/topics/22727321?invite-code=032064)' Risk Disclosure and Disclaimer:[Dolphin Research Disclaimer and General Disclosure](https://support.longbridge.global/topics/misc/dolphin-disclaimer) ### Related Stocks - [09901.HK](https://longbridge.com/en/quote/09901.HK.md) - [EDU.US](https://longbridge.com/en/quote/EDU.US.md) - [01797.HK](https://longbridge.com/en/quote/01797.HK.md) ## Comments (1) - **Teo CK · 2026-04-22T15:45:04.000Z**: good sharing