New Oriental Education (EDU) shares rallied 7.9% in the last trading session to close at $65. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 7.5% loss over the past four weeks.
Shares of EDU are expected to have gained on the optimism induced by the release of a fiscal stimulus on Tuesday by the People’s Bank of China. The stimulus encompasses interest rate cuts and additional funding opportunities, which have opened the window for increased business activities and consumer confidence.
This educational services provider is expected to post quarterly earnings of $1.14 per share in its upcoming report, which represents a year-over-year change of +0.9%. Revenues are expected to be $1.4 billion, up 27.1% from the year-ago quarter.
Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.
For New Oriental, the consensus EPS estimate for the quarter has been revised 58.7% lower over the last 30 days to the current level. And a negative trend in earnings estimate revisions doesn't usually translate into price appreciation. So, make sure to keep an eye on EDU going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
New Oriental is a member of the Zacks Schools industry. One other stock in the same industry, Perdoceo Education (PRDO), finished the last trading session 0.1% lower at $21.99. PRDO has returned -3.2% over the past month.
For Perdoceo Education , the consensus EPS estimate for the upcoming report has remained unchanged over the past month at $0.53. This represents a change of -17.2% from what the company reported a year ago. Perdoceo Education currently has a Zacks Rank of #4 (Sell).
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