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TAL Education Group (TAL)
NYSE:TAL
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TAL Education Group
(NYSE:TAL)
72Outperform
Positive Factors
Profitability
Non-GAAP net profit exceeded Bloomberg consensus by 63%, reaching a net profit margin of 6.4% compared to -0.5% previously.
Revenue Growth
Total revenue increased by 62% year-over-year, surpassing Bloomberg consensus by 13%.
Negative Factors
Future Guidance
Despite no more guidance for F3Q25-2025, continuous investment in enrichment learning services and newly launched Xbook is expected to drive growth.
TAL Education Group (TAL) vs. S&P 500 (SPY)
Market Cap
$7.82B
Dividend YieldN/A
Average Volume (3M)7.66M
Price to Earnings (P/E)66.5
Beta (1Y)1.30
Revenue Growth55.62%
EPS GrowthN/A
CountryUS
Employees15,000
SectorTechnology
Sector Strength45
IndustryEducation
Share Statistics
EPS (TTM)0.19
Shares Outstanding458,101,780
10 Day Avg. Volume5,905,957
30 Day Avg. Volume7,658,121
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)5.25
Price to Cash Flow (P/CF)N/A
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$15.40Price Target Upside19.29% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
TAL Education Group Business Overview & Revenue Model
Company DescriptionTAL Education Group (TAL) is a leading K-12 after-school tutoring services provider in China, dedicated to improving educational opportunities for students. With a focus on delivering high-quality educational content and services, TAL operates through various brands, offering comprehensive tutoring across multiple subjects such as mathematics, science, and English. The company leverages technology to deliver personalized learning experiences through both online and offline channels, catering to diverse learning needs.
How the Company Makes MoneyTAL Education Group generates revenue primarily through its comprehensive tutoring programs. The company's key revenue streams include tuition fees from its after-school tutoring services, which are offered both in-person at learning centers and online through digital platforms. TAL has developed a diverse portfolio of educational offerings that cater to various age groups and subjects, allowing it to tap into the expansive educational market in China. The company also benefits from strategic partnerships with educational institutions and technology firms, which enhance its curriculum and technological capabilities, further driving enrollment and revenue growth.
TAL Education Group Financial Statement Overview
Summary
TAL Education Group showcases a significant financial turnaround with a strong revenue growth of 38.9% and improved profitability. The balance sheet reflects low leverage and financial stability, while cash flow generation is efficient. However, operational efficiency remains an area for improvement, as indicated by a slightly negative EBIT margin.Income Statement
The company shows a significant turnaround in profitability with a positive net income of $119.41M TTM (Trailing-Twelve-Months) compared to losses in previous years. The gross profit margin is strong at approximately 53.6% for TTM, indicating good cost management. However, EBIT margin remains slightly negative, suggesting ongoing challenges in operational efficiency. Revenue growth is robust, with a 38.9% increase from the prior year, reflecting a positive growth trajectory.72
Positive
Balance Sheet
TAL Education Group maintains a healthy balance sheet with a low debt-to-equity ratio of 0.10 in the TTM period, indicating low financial leverage and strong equity position. The equity ratio stands at roughly 65.2%, showcasing financial stability. However, ROE is modest at about 3.17%, suggesting room for improvement in generating returns from equity.78
Positive
Cash Flow
The cash flow position is strong, with a substantial operating cash flow to net income ratio of 5.03 TTM, indicating efficient cash generation relative to net income. Free cash flow has grown significantly, turning positive and enhancing financial flexibility. The free cash flow to net income ratio stands at 4.08, reflecting a solid conversion of earnings into cash.80
Positive
| Breakdown | |||||
| TTM | Mar 2024 | Mar 2023 | Mar 2022 | Mar 2021 | Mar 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 1.33B | 1.49B | 1.02B | 4.39B | 4.50B | 3.27B | Gross Profit |
| 720.08M | 806.12M | 583.41M | 2.19B | 2.45B | 1.80B | EBIT |
| -102.58M | -69.23M | -90.73M | -179.20M | -330.69M | 26.14M | EBITDA |
| -50.73M | 42.59M | -73.27M | -614.52M | -46.69M | 76.36M | Net Income Common Stockholders |
| -64.62M | -3.57M | -129.73M | -1.18B | -154.73M | -119.98M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 3.84B | 3.30B | 3.17B | 2.71B | 5.94B | 2.22B | Total Assets |
| 5.79B | 4.93B | 4.72B | 5.08B | 12.11B | 5.57B | Total Debt |
| 381.09M | 239.22M | 157.72M | 242.09M | 4.15B | 1.52B | Net Debt |
| -1.86B | -1.97B | -1.86B | -1.40B | 903.28M | -357.04M | Total Liabilities |
| 2.03B | 1.29B | 903.44M | 1.08B | 6.91B | 3.03B | Stockholders Equity |
| 3.77B | 3.66B | 3.84B | 4.03B | 5.20B | 2.52B |
| Cash Flow | Free Cash Flow | ||||
| 178.63M | 184.88M | -102.97M | -1.19B | 708.99M | 667.79M | Operating Cash Flow |
| 288.96M | 306.17M | 7.36M | -939.18M | 954.73M | 855.85M | Investing Cash Flow |
| 157.11M | 95.07M | -301.63M | 1.37B | -2.64B | -338.81M | Financing Cash Flow |
| -233.25M | -233.09M | -66.18M | -2.77B | 4.79B | 131.23M |
TAL Education Group Technical Analysis
Neutral
12.91
Price Trends
11.97
Positive
11.18
Positive
10.55
Positive
Market Momentum
0.22
Positive
50.65
Neutral
47.64
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TAL, the sentiment is Neutral. The current price of 12.91 is below the 20-day moving average (MA) of 13.70, above the 50-day MA of 11.97, and above the 200-day MA of 10.55, indicating a neutral trend. The MACD of 0.22 indicates Positive momentum. The RSI at 50.65 is Neutral, neither overbought nor oversold. The STOCH value of 47.64 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for TAL.
TAL Education Group Risk Analysis
TAL Education Group disclosed 84 risk factors in its most recent earnings report. TAL Education Group reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
TAL Education Group Peers Comparison
Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $8.08B | 20.46 | 10.40% | ― | 34.42% | 28.54% | |
72 Outperform | $7.82B | 66.51 | 3.23% | ― | 55.62% | ― | |
72 Outperform | $118.54M | 8.45 | 11.28% | ― | -10.54% | -43.28% | |
58 Neutral | $21.35B | 10.05 | -19.26% | 2.35% | 5.02% | -22.63% | |
53 Neutral | $972.88M | 83.74 | 25.15% | ― | 5.51% | ― | |
52 Neutral | $885.08M | ― | -41.45% | ― | 35.93% | -641.17% | |
42 Neutral | $45.63M | ― | -96.68% | ― | -15.92% | -164.65% |
* Technology Sector Average
Performance Comparison
TAL
TAL Education Group
13.09
0.22
1.71%
EDU
New Oriental Education Tech
49.01
-39.58
-44.68%
BEDU
Bright Scholar Education Holdings
1.46
-0.73
-33.33%
GOTU
Gaotu Techedu
3.58
-3.88
-52.01%
DAO
Youdao
8.32
3.86
86.55%
IH
iHuman
2.40
0.55
29.73%
TAL Education Group Earnings Call Summary
Earnings Call Date: Jan 23, 2025 | % Change Since: 41.40% | Next Earnings Date: Apr 24, 2025
Earnings Call Sentiment Neutral
The earnings call reflects significant revenue growth, product innovation, and strategic expansion. However, increased costs, declining margins, and ongoing losses in the learning device segment present challenges. While the company is experiencing strong growth, profitability is under pressure.Highlights
Significant Revenue Growth
Net revenues for the quarter reached USD 606.4 million, reflecting a year-over-year growth of 62.4% in USD terms.
Strong Performance in Peiyou Enrichment Small Classes
Peiyou enrichment small classes remain the largest revenue contributor, showing continued growth in market demand and product quality.
Innovative Product Launches
Launch of the XBook learning device with features like a color ePaper display and AI-driven functionalities, receiving positive initial user feedback.
Expansion of Learning Devices
Revenue from learning devices increased year-over-year and quarter-over-quarter, supported by a diversified product lineup and e-commerce activities.
Recognition at Consumer Electronics Show
The XPad won a twice PIC award at the Consumer Electronics Show 2025, highlighting market recognition and innovation.
Improved Financial Performance
Net income attributable to TAL was USD 23.1 million, compared to a net loss of USD 23.9 million in the same period last year.
Lowlights
Increased Costs and Expenses
Cost of revenue increased by 65.5%, with selling and marketing expenses rising by 85.6% year-over-year, affecting overall profitability.
Decline in Gross Margin
Gross margin decreased to 52.7% from 53.6% year-over-year, indicating pressure on profitability.
Anticipated Revenue Decline in Learning Devices
Expected year-over-year revenue decline from learning devices in the fourth quarter due to seasonal factors.
Ongoing Losses in Learning Devices
The learning device business continues to operate at a loss, though it is considered strategically important.
Company Guidance
During the TAL Education Group's Q3 2025 earnings call, management highlighted substantial growth in key financial metrics and shared future guidance. Net revenues for the quarter reached USD 606.4 million, reflecting a year-over-year increase of 62.4%, while gross profit rose by 59.6% to USD 319.8 million. The company reported a net income attributable to TAL of USD 23.1 million, a significant improvement from a net loss of USD 23.9 million in the same period last year. Despite a loss from operations of USD 17.4 million, non-GAAP metrics showed a more favorable picture with a non-GAAP net income of USD 38.6 million. Key operational metrics for their learning devices included an average weekly active rate of 80% and average daily usage time of one hour per device. Looking forward, TAL anticipates potential quarterly fluctuations in their learning device revenues due to seasonal e-commerce activities but remains committed to sustainable growth across all business lines, focusing on product quality and innovation to meet evolving market demands.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.