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TAL Education Group (TAL)
NYSE:TAL
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TAL Education Group
(NYSE:TAL)
Rating:72Outperform
Price Target:―
Positive Factors
Cash Position
TAL maintained a strong cash position with $3.6bn net cash, providing flexibility to fund growth initiatives while balancing shareholder returns.
Financial Results
Non-GAAP net profit exceeded Bloomberg consensus by 63%, reaching a net profit margin of 6.4% compared to -0.5% previously.
Revenue Growth
Revenue is projected to grow 39%, signaling strong business performance.
Negative Factors
Earnings Performance
Non-GAAP net profit decreased by 85% year over year to US$7 million, significantly below Bloomberg's estimate of US$50 million.
Profitability
The company's Learning Device business will require significant investments in sales and marketing spending, and is not expected to turn profitable in the short term.
Revenue Performance
Revenue was 4% below Bloomberg's estimate of US$632 million.
TAL Education Group (TAL) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$6.43B
Dividend YieldN/A
Average Volume (3M)7.22M
Price to Earnings (P/E)75.6
Beta (1Y)0.63
Revenue Growth55.62%
EPS GrowthN/A
CountryUS
Employees15,000
SectorTechnology
Sector Strength84
IndustryEducation & Training Services
Share Statistics
EPS (TTM)-0.01
Shares Outstanding458,101,780
10 Day Avg. Volume5,690,682
30 Day Avg. Volume7,221,238
Financial Highlights & Ratios
PEG Ratio0.39
Price to Book (P/B)1.17
Price to Sales (P/S)0.00
P/FCF Ratio-43.54
Enterprise Value/Market Cap0.41
Enterprise Value/Revenue0.37
Enterprise Value/Gross Profit2.36
Enterprise Value/Ebitda47.94
Forecast
1Y Price Target
$11.60Price Target Upside11.75% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering4
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 Earnings Call Summary
Earnings Call Date:Apr 24, 2025
(Q4-2025)
| % Change Since: -5.46%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed view of TAL's performance. While the company achieved strong revenue growth and maintained a solid cash position, it also experienced increased losses and rising expenses. The new board appointment and service retention rates were positive, but the financial challenges indicate a need for more efficient cost management.Q4-2025 Updates
Positive Updates
Strong Revenue Growth
The company recorded net revenues of $610.2 million for the fourth quarter, reflecting year-over-year growth of 42.1% in USD terms and 44.3% in RMB terms. For the full fiscal year, net revenues totaled $2.3 billion, up 51% year-over-year.
Peiyou Small Class Retention Rate
The retention rate for Peiyou Small Class reached 80% during the fiscal quarter, indicating strong customer satisfaction and engagement.
New Appointment to the Board
Mr. Yi Wang was welcomed as the new Independent Director and Chairman of the Compensation Committee, bringing extensive experience to strengthen TAL's strategic direction and governance.
Cash and Investments Position
As of February 28, 2025, the company held $3.2 billion in cash, cash equivalents, short-term investments, and restricted cash, providing a strong financial base for future growth and investments.
Negative Updates
Increased Operating Loss
The company reported a loss from operations of $16.0 million for the quarter, compared to a loss of $11.1 million in the same period last year.
Higher Selling and Marketing Expenses
Selling and marketing expenses for the quarter rose 73.1% from the prior year, with non-GAAP selling and marketing expenses accounting for 35.1% of net revenues, up from 28% the previous year.
Decline in Net Income
Net loss attributable to TAL was $7.3 million for the quarter, a decrease from net income of $27.5 million in the same period last year.
Company Guidance
During TAL Education Group's fourth-quarter and fiscal year 2025 earnings call, the company reported net revenues of $610.2 million, marking a year-over-year growth of 42.1% in U.S. dollar terms and 44.3% in RMB terms. For the entire fiscal year, net revenues reached $2.3 billion, reflecting a 51% increase from the previous year. Non-GAAP income from operations was $61.8 million, while non-GAAP net income attributable to TAL was $149.5 million. The company highlighted strong performance in its Peiyou Small Class Enrichment programs, which achieved an 80% retention rate. TAL also discussed its strategic focus on integrating AI into learning services and content solutions, aiming to enhance user experiences and operational efficiency. Additionally, the Board extended the share repurchase program, authorizing up to $490.7 million in repurchases through April 2026.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 | ||||
| 2.07B | 1.49B | 1.02B | 4.39B | 4.50B | 3.27B | Gross Profit |
| 1.11B | 806.12M | 583.41M | 2.19B | 2.45B | 1.80B | EBIT |
| 1.80M | -69.23M | -90.73M | -179.20M | -330.69M | 26.14M | EBITDA |
| 59.08M | 42.59M | -73.27M | -614.52M | -46.69M | 76.36M | Net Income Common Stockholders |
| 119.41M | -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 | ||||
| 487.77M | 184.88M | -102.97M | -1.19B | 708.99M | 667.79M | Operating Cash Flow |
| 600.51M | 306.17M | 7.36M | -939.18M | 954.73M | 855.85M | Investing Cash Flow |
| -571.63M | 95.07M | -301.63M | 1.37B | -2.64B | -338.81M | Financing Cash Flow |
| 42.14M | -233.09M | -66.18M | -2.77B | 4.79B | 131.23M |
TAL Education Group Technical Analysis
Negative
10.38
Price Trends
10.06
Positive
11.69
Negative
10.80
Negative
Market Momentum
0.07
Positive
48.62
Neutral
27.72
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TAL, the sentiment is Negative. The current price of 10.38 is below the 20-day moving average (MA) of 10.56, above the 50-day MA of 10.06, and below the 200-day MA of 10.80, indicating a neutral trend. The MACD of 0.07 indicates Positive momentum. The RSI at 48.62 is Neutral, neither overbought nor oversold. The STOCH value of 27.72 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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 (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $121.72M | 9.14 | 10.27% | 3.63% | -10.89% | -45.97% | |
74 Outperform | $7.67B | 19.98 | 10.36% | 1.21% | 18.73% | 26.72% | |
72 Outperform | $6.43B | 75.62 | 2.28% | ― | 55.62% | ― | |
62 Neutral | $11.96B | 10.09 | -7.50% | 3.10% | 7.33% | -8.11% | |
61 Neutral | $945.11M | ― | -36.29% | ― | 58.34% | -602.43% | |
54 Neutral | $1.03B | 51.00 | 25.15% | ― | -2.04% | ― | |
46 Neutral | $55.89M | ― | -97.59% | ― | -23.75% | -201.80% |
* Technology Sector Average
Performance Comparison
TAL
TAL Education Group
10.38
-0.05
-0.48%
EDU
New Oriental Education Tech
46.95
-24.34
-34.14%
BEDU
Bright Scholar Education Holdings
1.65
-0.50
-23.26%
GOTU
Gaotu Techedu
3.93
-0.92
-18.97%
DAO
Youdao
8.75
5.09
139.07%
IH
iHuman
2.31
0.54
30.51%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.