New Oriental (EDU) slides after Q3 beat as investors focus on costs and positioning
New Oriental Education (EDU) fell about 3.4% on April 23, 2026, a day after reporting fiscal Q3 results. Despite revenue rising 19.8% to $1.42 billion and adjusted EPS of $0.95 per ADS, the stock slid as investors digested costs rising faster than revenue and took profits after the post-earnings reaction.
1) What’s moving the stock
New Oriental Education & Technology Group’s U.S.-listed ADSs (EDU) traded lower on Thursday, April 23, 2026, extending a whipsaw move that followed the company’s fiscal third-quarter results released April 22. The decline comes even though the company posted a headline beat on revenue and adjusted earnings, suggesting the market is shifting focus to quality-of-growth details, cost intensity, and near-term positioning after the print. (investing.com)
2) Earnings: beats, but investors scrutinize the expense line
For fiscal Q3 ended February 28, 2026, New Oriental reported net revenues of $1.417 billion (+19.8% year over year) and adjusted earnings of $0.95 per ADS, with operating margin of 12.7% and non-GAAP operating margin of 14.3%. However, the company also disclosed that cost of revenues rose 23.4% year over year to $656.2 million while total operating costs and expenses increased 16.9% to $1.237 billion—figures that can amplify concerns about how much spending is required to sustain growth. (prnewswire.com)
3) Outlook and shareholder returns
Management lifted full-year fiscal 2026 revenue guidance to $5.561 billion–$5.599 billion and guided fiscal Q4 revenue to $1.430 billion–$1.467 billion, implying 15%–18% year-over-year growth for the quarter. The board also approved the second installment of a fiscal 2026 dividend of $0.60 per ADS, with a May 15, 2026 record date and expected ADS payment around June 5, 2026. (prnewswire.com)
4) Why the stock is down today despite the beat
With the earnings catalyst now behind it, EDU’s pullback appears tied to post-results repositioning: investors are weighing strong top-line growth and improved non-GAAP margin against the faster rise in cost of revenues and the potential for incremental investment needs across newer initiatives. In practice, that mix often leads to a “sell-the-news” or profit-taking session even when headline numbers beat, especially after an early positive reaction to the report. (prnewswire.com)