Is EDU a Buy? What to Consider in 2026
Last updated July 2026
Short answer
The bull case for New Oriental Education & Technology Group (EDU) rests on Overseas test prep and study-abroad demand: Overseas test preparation and study-abroad consulting were spared by the crackdown and remain core growth engines. Revenue (FY2025) is ~$4.9B. If you believe that thesis holds, the real questions become position sizing and overlap, not timing. The main risk to that view: The dominant risk is Chinese regulation: the same government that erased the K-9 tutoring business could tighten rules on non-academic tutoring, devices, or e-commerce with little warning. Whether EDU is a buy comes down to whether you believe the thesis. This is informational, not a recommendation, and Walnut is not an investment adviser.
New Oriental Education & Technology Group is a Beijing-based education company that trades in the US as an ADR under the ticker EDU (a Hong Kong listing, 9901, also exists). Founded in 1993 as an English and test-prep school, it became China's best-known tutoring brand before Beijing's 2021 "double reduction" policy banned for-profit academic tutoring of core K-9 subjects and wiped out most of the company's original business. Since then it has rebuilt around segments that remain permitted: overseas test preparation and study-abroad consulting, non-academic tutoring (arts, coding, STEAM, study tours), intelligent learning devices, and a fast-growing live-streaming e-commerce operation run through its East Buy (Oriental Select) platform. The reinvention has been strikingly effective. Revenue has returned to growth, with fiscal 2025 (year ended May 2025) net revenues of roughly $4.9 billion and fiscal 2026 guided toward roughly $5.6 billion, while recent quarters showed near 20 percent year-over-year revenue growth and expanding margins. The investment picture is a blend of a genuine operating recovery and outsized macro and governance risk: EDU is a China ADR whose economics flow through a variable-interest-entity (VIE) structure, its core end markets sit under an unpredictable regulator, and its e-commerce arm adds a lower-margin, more volatile revenue stream layered on top of the education base.
What's the case for buying EDU?
1. Overseas test prep and study-abroad demand
Overseas test preparation and study-abroad consulting were spared by the crackdown and remain core growth engines. Continued Chinese appetite for foreign university admission (US, UK, Commonwealth) supports steady demand for these higher-margin services, which anchor the recovery.
2. New learning businesses and smart devices
Non-academic tutoring (arts, coding, STEAM, study tours) and intelligent learning devices are the permitted replacement for the banned K-9 academic tutoring. These lines have scaled quickly across new cities and now represent a meaningful share of the education segment's growth.
3. East Buy live-streaming e-commerce
The East Buy (Oriental Select) live-streaming commerce arm, built from repurposed teachers and infrastructure, became a large revenue and profit contributor and diversifies the company beyond classrooms. It is lower-margin and more volatile than education, so its swings can move consolidated results.
4. Balance sheet and shareholder returns
New Oriental carries a large net cash position, which funds expansion into new cities and adjacent ventures (including travel and cultural tourism) and has supported share buybacks. That financial cushion gives it flexibility that many recovering peers lack.
What are the risks to EDU?
The dominant risk is Chinese regulation: the same government that erased the K-9 tutoring business could tighten rules on non-academic tutoring, devices, or e-commerce with little warning. As a US-listed ADR built on a VIE structure, holders own contractual claims on offshore entities rather than direct equity in the operating businesses, and US-China tensions keep delisting risk alive. The East Buy e-commerce segment is competitive, personality-driven, and lower margin, so its revenue can be lumpy. Currency (renminbi) translation, macro softness in China, and intense competition from TAL Education and others add further volatility.
How is EDU valued? (as of July 2026)
Snapshot for EDU as of July 2026, sourced from Yahoo Finance and may be delayed. Valuation figures move with price and earnings; verify the current numbers with your broker before deciding.
- Revenue (FY2025): ~$4.9B
- Revenue (FY2026 guidance): ~$5.6B
- Recent quarterly revenue growth: ~20% YoY
- Net income (FY2025): ~$372M
- Market cap: ~$7B
- Gross margin: ~55%
New Oriental returned to solid growth after the crackdown, with fiscal 2025 revenue near $4.9 billion and fiscal 2026 guided toward roughly $5.6 billion. The stock has traded well below pre-2021 levels and below some analysts' fair-value estimates, reflecting a persistent China-ADR discount rather than weak operations. A large net cash balance means enterprise value is well below market cap.
How do you decide if EDU is a buy?
Rather than asking whether EDU is a buy in the abstract, it tends to help to answer four questions:
- Thesis: do you believe the case above, and is it still true today?
- Time horizon: a single stock can be volatile, so a longer horizon absorbs more of the swings.
- Position sizing: a thesis can be right and the sizing still wrong; decide how much of your portfolio one name should be.
- Overlap: check whether you already hold EDU indirectly through an index or sector ETF before adding more.
For the full picture, see the EDU stock guide (what the company does, the ETFs that hold it, similar stocks, and the themes it fits). In Walnut you can ask its AI about EDU against your real portfolio and see your actual exposure before deciding.
The bottom line on EDU
The bottom line: New Oriental Education & Technology Group's story right now is Overseas test prep and study-abroad demand, with revenue (fy2025) at ~$4.9B. If you believe that narrative continues, the call is about sizing EDU sensibly and checking overlap with what you own; if you doubt it (the risk: the dominant risk is Chinese regulation: the same government that erased the K-9 tutoring business could tighten rules on non-academic tutoring, devices, or e-commerce with little warning.), it is not for you. Decide from the thesis, not the ticker. Walnut is not an investment adviser.
Build a basket around EDU with Walnut
Use New Oriental Education & Technology Group as one constituent in a thematic basket Walnut's AI helps you assemble. Describe a thesis you believe in, the AI proposes the holdings and weights, and you approve before any broker order.
FAQ
Is EDU a good stock to buy right now?
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The case for New Oriental Education & Technology Group right now is Overseas test prep and study-abroad demand, with revenue (fy2025) at ~$4.9B. If you believe that thesis holds, EDU is a way to own it and the real questions are sizing and overlap, not timing; the main risk to that view is the dominant risk is Chinese regulation: the same government that erased the K-9 tutoring business could tighten rules on non-academic tutoring, devices, or e-commerce with little warning. So it comes down to whether you believe the thesis. Walnut is not an investment adviser and this is not a recommendation.
What does New Oriental Education & Technology Group do?
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New Oriental Education & Technology Group is a Beijing-based education company that trades in the US as an ADR under the ticker EDU (a Hong Kong listing, 9901, also exists).
What are the main risks of EDU?
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The dominant risk is Chinese regulation: the same government that erased the K-9 tutoring business could tighten rules on non-academic tutoring, devices, or e-commerce with little warning. As a US-listed ADR built on a VIE structure, holders own contractual claims on offshore entities rather than direct equity in the operating businesses, and US-China tensions keep delisting risk alive. The East Buy e-commerce segment is competitive, personality-driven, and lower margin, so its revenue can be lumpy. Currency (renminbi) translation, macro softness in China, and intense competition from TAL Education and others add further volatility.
What does New Oriental Education do?
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It is one of China's largest private education companies, offering overseas test preparation, study-abroad consulting, non-academic tutoring, and smart learning devices, plus a large live-streaming e-commerce business through its East Buy (Oriental Select) platform.
Why did EDU stock crash in 2021?
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China's 2021 "double reduction" policy banned for-profit tutoring of core K-9 school subjects, which eliminated most of New Oriental's original business and wiped out much of its market value almost overnight, along with peers like TAL Education.
How does New Oriental make money now?
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Revenue comes from overseas test prep and study-abroad consulting, permitted non-academic tutoring and learning devices, educational materials, and the East Buy live-streaming e-commerce arm, which sells consumer goods online.
Is EDU a Chinese ADR, and what does that mean?
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Yes. EDU is a US-listed American Depositary Receipt whose economics flow through a variable-interest-entity (VIE) structure, so holders own contractual claims on offshore entities rather than direct equity in the mainland operating businesses, adding governance and delisting risk.
Walnut is informational and is not an investment adviser. This page is educational and not a recommendation to buy or sell EDU; figures are approximate and dated, and your own situation, time horizon, and risk tolerance should drive any decision. Verify current data before investing.