According to a research report published by UBS, New Oriental's revenue performance for the first quarter of fiscal year 2027 surpassed expectations. Profits were generally in line with expectations, while operating profit margins were slightly lower than expected, mainly due to the increase in Oriental Selection's revenue contribution and the impact of additional employee costs. Management expects revenue growth to accelerate in the next quarter and exceed market expectations. UBS believes it may be driven by Oriental Selection, while the core education business continues to advance according to plan. The company maintains the 2027 revenue growth guideline of 14% to 18%, which UBS believes is conservative. The bank believes that the first fiscal quarter results continue to show the market its fundamental resilience. It is expected that the stock price reaction after the performance was mainly driven by the fact that the overall operating profit margin fell slightly short of expectations, rather than a marked weakening of the core business. UBS raised New Oriental's revenue forecast for the second fiscal quarter and fiscal year 2027 to 27% and 19%, mainly reflecting an increase in Oriental's share of revenue; it also lowered the adjusted net profit forecast for the next quarter and fiscal year 2027 by 4% and 6%, respectively, to reaffirm the “buy” rating. The target price for US stocks was lowered from $81 to $76.

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