Investors are evaluating the potential of two consumer discretionary stocks: New Oriental Education & Technology Group and Nerdy, Inc.. Both companies have distinct business models and financial profiles, leading to a critical comparison for investors looking to make informed decisions.
Profitability Comparison
When assessing profitability, key metrics include net margins, return on equity, and return on assets. New Oriental Education & Technology Group has demonstrated stronger profitability compared to Nerdy. The financial data indicates that New Oriental’s net margins and returns on equity and assets outpace those of Nerdy, reflecting a more robust financial performance.
Earnings and Valuation Insights
In terms of revenue and earnings, New Oriental Education & Technology Group leads with higher figures than Nerdy. However, when examining valuation, Nerdy is more appealing from a price perspective. Nerdy currently trades at a lower price-to-earnings ratio than New Oriental, suggesting it may be a more affordable option for investors seeking growth potential.
Institutional ownership also presents a contrasting picture. Approximately 39.1% of Nerdy shares are held by institutional investors, while New Oriental Education & Technology Group has 15.5% of its shares held by insiders. Notably, Nerdy enjoys a significant insider ownership rate of 50.9%, indicating a strong belief among insiders in the company’s future performance.
Analysts have weighed in on both stocks, providing recommendations and price targets that further inform investor strategies. According to MarketBeat.com, New Oriental Education & Technology Group has a consensus target price of $59.53, representing a potential upside of 6.53%. In contrast, Nerdy has a target price of $1.25, with a higher potential upside of 11.11%. This suggests analysts view Nerdy more favorably in terms of growth potential.
Volatility and risk are also critical factors for potential investors. New Oriental Education & Technology Group has a beta of 0.32, indicating its stock price is 68% less volatile than the S&P 500. Conversely, Nerdy has a beta of 1.78, suggesting its stock is 78% more volatile than the market index. This distinction is essential for risk-aware investors.
In summary, New Oriental Education & Technology Group outperforms Nerdy in ten out of fourteen evaluated factors. This analysis highlights the strengths and weaknesses of both companies, providing a thorough overview for investors considering their next steps in the consumer discretionary sector.
About New Oriental Education & Technology Group: Founded on November 16, 1993, in Beijing, China, the company specializes in private educational services, offering various segments including test preparation courses and educational materials.
About Nerdy, Inc.: Established in 2007 and headquartered in Saint Louis, Missouri, Nerdy operates a platform for live online learning. Its flagship service, Varsity Tutors, connects students with educators using advanced technology, including artificial intelligence, to enhance the learning experience.
Investors should consider these insights carefully as they navigate their choices in the evolving landscape of the educational services market.
