Price To Earnings Valuation in Focus For New Oriental Education & Technology Group Inc. (NYSE:EDU)

Focusing in on the valuation of New Oriental Education & Technology Group Inc. (NYSE:EDU), we can take a look at several ratios. One of the quickest ways to determine the projected value of a stock is the price to earnings growth, or PEG ratio. This formula was popularized by Peter Lynch and according to his calculations, a stock which is fairly valued will have a price to earnings ratio equal to its rate of growth. Simply put, a stock with a PEG ratio of 1 would be considered fairly valued.

A stock with a ratio of under 1.0 would be undervalued and a stock with a PEG over 1.0 would be considered over valued. New Oriental Education & Technology Group Inc. currently has a PEG ratio of 2.67.Investors might be reviewing portfolio performance over the last six months. Many investors will be tracking shares that are trading near important levels such as the 52-week high and 52-week low. When a stock is trading near new 52-week high, investors may have to decide whether they should sell or hold on for future gains. Stocks that are moving towards a new 52-week low may also be worth keeping an eye on. There are many factors that can have an impact on the health of a particular stock. This is one reason why stock picking can be extremely tough at times. Because there are always so many things to monitor, it may be next to impossible to build a formula that will continually beat the market. Even after all the applicable information has been examined, the investor still has to make sense of the data and figure out what to do with it. Knowing how to use company data can end up being the difference between handsome gains and crippling losses. 

Most importantly investors want to know where the stock is headed from here. In order to get a sense of Wall Street sentiment, we can look to equity research analyst estimates. On a one to five ratings scale where 1.0 indicates a Strong Buy, 2.0 indicates a Buy, 3.0 a Hold, 4.0 a Sell and 5.0 a Stong Sell. New Oriental Education & Technology Group Inc. (NYSE:EDU) currently has an average analyst recommendation of 1.70 according to analysts. This is the average number based on the total brokerage firms taken into consideration by Beta Systems Research. The same analysts have a future one-year price target of $116.61 on the shares.

In addition to sell-side rational, we can also take a look at some technical indicators. The stock is currently 9.46% away from its 50-day simple moving average and 33.44% away from the 200 day average. Based on a recent trade, the shares are -3.98% away from the 52-week high and 109.79% from the 52-week low. The RSI (Relative Strength Index), which shows price strength by comparing upward and downward close to close movements.

An RSI approaching 70 is typically deemed to be nearing overbought status and could be ripe for a pullback. Alternatively an RSI nearing 30 indicates that the stock could be getting oversold and might be considered undervalued. The RSI for New Oriental Education & Technology Group Inc.(NYSE:EDU) currently stands at 61.57.

Stock Performance
New Oriental Education & Technology Group Inc. has posted trailing 12 months earnings of $1.50 per share. The company has seen a change of 8.30% earnings per share this year. Analysts are predicting 30.67% for the company next year. The firm is yielding 5.70% return on assets and 11.50% return on equity.

Stock market investors typically have to deal with the risk element when making decisions about specific holdings. There will always be a trade-off between risk and reward, and this is quite evident in the equity market. In general, the more that someone is willing to risk, the higher the potential gains. Investors might need to be willing to identify their risk levels before attempting to jump into the fray. Some investors will choose to play it safe while others will opt to swing for the fences. Managing risk becomes increasingly more important when economic conditions are cloudy. Accumulating the most amount of understanding and relevant information about a company may be a good place to start. Studying a company’s position in the current market may help with understanding how the company has set themselves up for future growth.

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