Why New Oriental Education & Technology (EDU) Stock Is Down Today

NEW YORK (TheStreet) -- New Oriental Education & Technology (EDU) was falling 3.3% to $22.68 Monday after missing analysts' estimates for revenue in the fiscal third quarter.

In its fiscal third quarter New Oriental posted earnings of 30 cents a share, beatings analysts' estimates of 23 cents a share by 3 cents. Revenue grew 16.4% to $254.4 million in the quarter. Analysts surveyed by Thomson Reuters expected revenue of $267.2 million for the quarter.

"Although the program transition currently underway in our POP Kids offering impacted growth in this segment during the quarter, we are encouraged that our overseas study business and middle and high school U-Can business continued to perform well," New Oriental president and CFO Louis T. Hsieh said in a press release. "Our overseas test preparation and overseas study consulting businesses together recorded year-over-year gross revenue growth of approximately 22.2% in the quarter, to approximately US$92.8 million, while our U-Can grade 7 to 12 all-subjects after-school tutoring business recorded year-over-year gross revenue growth of about 21.0% to approximately US$77.6 million."

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TheStreet Ratings team rates NEW ORIENTAL ED & TECH as a Buy with a ratings score of B-. TheStreet Ratings Team has this to say about their recommendation:

"We rate NEW ORIENTAL ED & TECH (EDU) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, notable return on equity, solid stock price performance and impressive record of earnings per share growth. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook."

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