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TAL Education Group ADR TAL

Morningstar Rating
$14.82 +0.09 (0.61%)
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Company Report

TAL Education Earnings: Strong Revenue Growth Beats Expectation but Shares Look Expensive

TAL Education's, or TAL’s, fiscal 2024 third-quarter (ending November 2023) result beat our expectation. Revenue in the quarter increased by 61% year on year and was 16% higher than our forecast. We believe this was mainly driven by the exponential shipment growth of its learning tablet. We increase our revenue growth assumption to 40% from 30% for 2024 to reflect the strong momentum. We also raise our gross margin assumption by 100-110 basis points through fiscal 2028 for positive operating leverage. Accordingly, we revise our net loss estimate to USD 52 million from USD 73 million in fiscal 2024, and we increase our net income estimate by 20%-39% from 2025 to 2028. We increase our fair value estimate by 10% to USD 7.70.

Price vs Fair Value

TAL is trading at a 92% premium.
Price
$14.82
Fair Value
$1.20
Uncertainty
Very High
1-Star Price
$42.39
5-Star Price
$5.17
Economic Moat
Shn
Capital Allocation
Pqh

Bulls Say, Bears Say

Bulls

Easing regulatory environment boosts investor sentiment, driving share price up.

Bears

High school academic afterschool tutoring as a for-profit business faces high regulatory risk.

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News

Trading Information

Previous Close Price
$14.73
Day Range
$14.6915.20
52-Week Range
$5.0915.52
Bid/Ask
$14.84 / $14.92
Market Cap
$9.46 Bil
Volume/Avg
4.4 Mil / 7.3 Mil

Key Statistics

Price/Earnings (Normalized)
151.43
Price/Sales
6.89
Dividend Yield (Trailing)
Dividend Yield (Forward)
Total Yield

Company Profile

TAL Education Group is a smart learning solutions provider in China. K-9 academic afterschool tutoring used to account for the majority of TAL's revenue before the regulatory changes in 2021 that imposed a nonprofit requirement on the business. After spinning off its K-9 academic afterschool tutoring business, TAL realigned its focus toward enrichment learning and content solutions.
Sector
Consumer Defensive
Industry
Education & Training Services
Stock Style Box
Total Number of Employees
11,700

Competitors

Valuation

Metric
TAL
EDU
02001
Price/Earnings (Normalized)
151.4340.804.99
Price/Book Value
2.614.151.07
Price/Sales
6.894.481.71
Price/Cash Flow
31.708.163.83
Price/Earnings
TAL
EDU
02001

Financial Strength

Metric
TAL
EDU
02001
Quick Ratio
2.801.680.28
Current Ratio
3.221.870.33
Interest Coverage
6.74
Quick Ratio
TAL
EDU
02001

Profitability

Metric
TAL
EDU
02001
Return on Assets (Normalized)
0.51%6.13%8.05%
Return on Equity (Normalized)
0.65%10.72%21.41%
Return on Invested Capital (Normalized)
−1.55%9.06%13.03%
Return on Assets
TAL
EDU
02001
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