A Pair of Stock To Put On Your Watchlist: New Oriental Education & Technology Group Inc. (EDU), 360 Finance Inc. (QFIN)

New Oriental Education & Technology Group Inc. (NYSE: EDU) shares are 20.51% up in the year-to-date (YTD) period and have moved 5.98% or $8.24 higher in the latest trading session. However, stock’s trailing 12-month performance remains nearly +43.24% lower. Comparatively, the stock is -4.51% down YTD and 21.81% over the trailing 3-month period. If we look at the shorter duration, its week performance is 7.24% and 8.04% over the month.

Analyst Recommendations

On February 28, 2020, Deutsche Bank recommended the EDU stock is a Buy, while earlier, CLSA had Upgrade the stock as a Buy on April 22, 2020. 29 analysts offering the recommendations for the stock have a consensus rating of 1.70 to suggest that the EDU stock is a “Strong Buy. 0 of the 29 analysts rate the stock as a “Sell”, while 0 has rated it as “Underweight”. 27 recommend buying, with 2 rating it as an Overweight.

The stock currently trades at $146.12 and analysts tracking its performance over the next 12 months have a consensus estimate price target of $163.11. The forecasts give the New Oriental Education & Technology Group Inc. stock a price target range of $182.67 on the higher side while at least one analyst think the stock could plunge to a low of $145.50. The two limits represent an upside potential of 20.01% or -0.43%.

Earnings Forecast

Analysts estimate the earnings to decrease -14.30% in the current quarter to $1.04, down from the $1.44 reported in the same quarter a year ago. For the current year, earnings should grow to an average of $3.72, up 18.00% from $3.03 reported last year. Analysts also offered guidance for the next financial quarter, with their average projected EPS at between $0.28 and $0.58. Wall Street estimates earnings per share to be at an average of $5.26 for the next year.

360 Finance Inc. (NASDAQ:QFIN), on the other hand, is trading around $12.71 with a market cap of $1.51B and analyst research firms have a negative stance on its shares. Analysts predict that the stock will reach $18.67 and spell out a more modest performance – a 31.92% return. Some analysts are even forecasting $2.64 per share in earnings this year on a short term (1 year) basis.

Let us briefly look at the 360 Finance Inc. (QFIN) financials, with a focus on its operating details as indicated in its earnings report for the last quarter.

Company balance sheet and cash flow

QFIN’s operating margin was positive on the trailing 12 months basis, remaining steady at 21.30%, while the operating expenses over the recent quarter were at $276.17 million. This represented a 41.58% of the company’s total revenues which amounted $472.75 million. With this in place, we can see that the company’s diluted EPS inclined $0.82 on the year-over-year period, growing to $0.60 as given in the last earnings report.

In terms of the balance sheet & cash flow as of (Sep 2020), the total assets figure advanced to $3.39 billion from $3.22 billion over the previous quarter. The company’s free cash flow for the quarter was $0.0.

Major holders

Insiders own 15.87% of the company shares, while shares held by institutions stand at 40.20% with a share float percentage of 84.35M. Investors are also buoyed by the number of investors in a company, with 360 Finance Inc. having a total of 75 institutions that hold shares in the company. The top two institutional holders are FountainVest China Capital Partners GP3 Ltd. with over 14.59 million shares worth more than $156.25 million. As of Jun 29, 2020, FountainVest China Capital Partners GP3 Ltd. held 11.51% of shares outstanding.

The other major institutional holder is TT International Asset Management LTD, with the investment firm holding over 11.73 million shares as of Jun 29, 2020. The firm’s total holdings are worth over $125.65 million and represent 9.25% of shares outstanding.