EDU Q4 FY26 Quick Take: Q4 (Mar–May) results were solid, modestly above sell-side estimates and company guidance. On trend, buy-side sentiment appears more upbeat than the sell side. After several quarters of expectation resets, the market seems to have moved past the prior spell of guide-downs and misses, and back to EDU's earlier pattern of cautious guides with reliable execution that ultimately beats.

While study-abroad remains in a slow recovery near term and K12 demographics will be a headwind longer term, the fading drag from livestreaming (still on a low base), share gains in non-academic and adult English, plus improved sentiment and ongoing buybacks, should provide a floor through volatility. At yesterday's close, the $8.1bn market cap implies ~12.5x FY27 P/E; versus a ~15x sector median and the 2-year EPS CAGR outlook, the valuation does not look stretched.

Key takeaways:

1) Slight overall beat

Total revenue grew 23% YoY; we estimate a 6–7ppt FX tailwind. That implies organic growth of ~16%, up nearly 3ppt QoQ. For FY27, management guided revenue of $6.45–6.68bn (+14–18% YoY), also above expectations.

2) Core education up 20%+

(1) K12 new-format businesses grew 24.8% YoY, with a slight sequential acceleration. Since last Oct, issuance of quality-education training licenses has declined MoM, with a 0.2% drop each month in Mar–May. As a leading incumbent, EDU stands to benefit from a tighter competitive landscape.

(2) Study-abroad services continued to recover to +3.6% YoY in Q4. Despite ongoing intl headwinds (visa issuances still down YoY, though the decline narrowed), EDU offset gaps in traditional consulting and training by expanding IELTS/TOEFL prep from primarily college youth into teens, and by adding on-campus study-abroad advisory services.

(3) Adult English was strong at +29% YoY, and we estimate high-school subjects delivered a steady ~18% growth (to be confirmed on the call). Both benefited from supply contraction and rising industry concentration.

(4) Based on movements in non-controlling interests, Oriental Selection revenue likely grew close to 40%. With new brands, it appears to have emerged from the overhang that started around Aug 2024.

3) Shareholder returns still ~6%

The company previously announced a 3-year return program, committing at least 50% of net income to shareholders via dividends and buybacks. Of the up-to-$300mn buyback authorized in Oct 2025 for the following 12 months, $274mn had been executed as of Jul 28.

For FY27, EDU plans to continue with $300mn in dividends plus $200mn in buybacks. On an $8.1bn market cap at yesterday's close, that implies ~6% shareholder return, a mid-range level. $New Oriental EDU & Tech(EDU.US) $NEW ORIENTAL-S(09901.HK)