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TAL Education Group (TAL)
NYSE:TAL
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TAL Education Group
(NYSE:TAL)
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Rating:75Outperform
Price Target:
$12.50
▲(12.71% Upside)
TAL Education Group's overall stock score is driven by strong financial recovery and positive earnings call insights, indicating a solid growth trajectory. However, the high P/E ratio and absence of a dividend yield suggest overvaluation, which tempers the overall score.
Positive Factors
Revenue Growth
Consistent revenue growth indicates strong market demand and effective business strategies, reinforcing TAL's competitive position in education.
Product Expansion
The expansion of the learning devices portfolio diversifies revenue streams and enhances TAL's technological edge in education.
Cash Flow Generation
Strong cash flow generation supports TAL's ability to invest in growth initiatives and maintain financial flexibility.
Negative Factors
Increased Marketing Expenses
Rising marketing costs could pressure margins and impact profitability if not matched by proportional revenue growth.
Learning Devices Profitability
Continued investment in learning devices without profitability may strain resources and delay returns on investment.
Operational Efficiency
Operational inefficiencies and debt management issues could hinder TAL's ability to sustain long-term growth and profitability.
TAL Education Group (TAL) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$6.68B
Dividend YieldN/A
Average Volume (3M)4.12M
Price to Earnings (P/E)64.6
Beta (1Y)0.50
Revenue Growth48.03%
EPS Growth97.15%
CountryUS
Employees15,000
SectorConsumer Defensive
Sector Strength42
IndustryEducation & Training Services
Share Statistics
EPS (TTM)0.07
Shares Outstanding462,499,880
10 Day Avg. Volume4,288,140
30 Day Avg. Volume4,122,069
Financial Highlights & Ratios
PEG Ratio-0.04
Price to Book (P/B)2.09
Price to Sales (P/S)3.50
P/FCF Ratio27.57
Enterprise Value/Market Cap0.40
Enterprise Value/Revenue1.11
Enterprise Value/Gross Profit2.06
Enterprise Value/Ebitda20.38
Forecast
1Y Price Target
$12.57Price Target Upside13.35% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
TAL Education Group Business Overview & Revenue Model
Company DescriptionTAL Education Group provides K-12 after-school tutoring services in the People's Republic of China. The company offers tutoring services to K-12 students covering various academic subjects, including mathematics, physics, chemistry, biology, history, geography, political science, English, and Chinese. It provides tutoring services primarily through small-class services under the Xueersi, Xueersi Online School, First Leap, Tipaipai, Xiaohou AI, Xiaohoucode, Aiqidao, Mamabang, Kaoyanbang, and Shunshunliuxue brand names; and personalized premium services under Izhikang name. The company also operates jzb.com, an online education platform; provides investment management and consulting services; develops and sells software and networks, as well as related consulting services; and sells educational materials and products. TAL Education Group was founded in 2003 and is headquartered in Beijing, the People's Republic of China.
How the Company Makes MoneyTAL Education Group generates revenue through various streams, primarily from its tutoring services offered to K-12 students. The company charges students for after-school tutoring sessions, which can be conducted in-person or online. Key revenue streams include tuition fees from individual lessons, package deals for multiple sessions, and subscription fees for online learning platforms. Additionally, TAL has developed partnerships with educational institutions and technology providers, enhancing its service offerings and expanding its market reach. The company also invests in educational content creation, which adds value to its services and contributes to customer retention and acquisition. Factors such as the growing demand for quality education in China, increased parental spending on children's education, and the ongoing shift towards digital learning platforms play a significant role in TAL's revenue generation.
TAL Education Group Earnings Call Summary
Earnings Call Date:Jul 31, 2025
(Q1-2026)
| % Change Since: |
Next Earnings Date:Oct 30, 2025
Earnings Call Sentiment Positive
TAL Education Group's earnings call highlighted strong revenue growth and the successful expansion of their learning devices portfolio. However, increased selling and marketing expenses and the investment phase of the learning devices business posed challenges. Overall, the company demonstrated a positive trajectory with solid financial performance and strategic growth initiatives.Q1-2026 Updates
Positive Updates
Significant Revenue Growth
TAL Education recorded net revenues of USD 575 million, reflecting a year-over-year growth of 38.8% in USD terms and 39.4% in RMB terms.
Strong Performance in Learning Services
The Peiyou Small Class Enrichment programs and online enrichment learning showed steady growth, with positive feedback from both learners and parents. Enrollment and retention rates are strong, with Peiyou Small Class retention around 80%.
Expansion of Learning Devices Portfolio
Launched three new AI-powered learning devices in May, namely the P4, S4, and T4, targeting diverse user needs and price tiers.
Improvement in Gross Margin
Gross profit increased by 47.3% to USD 315.4 million, with gross margins rising from 51.7% to 54.9% year-over-year.
Positive Operating Income
Achieved positive operating income of USD 14.3 million, compared to a loss from operations of USD 17.3 million in the same period last year.
Strong Cash Flow
Net cash provided by operating activities for the first quarter was USD 347.8 million.
Negative Updates
Increased Selling and Marketing Expenses
Selling and marketing expenses increased by 47.7% year-over-year, driven by increased marketing activities, impacting overall profitability.
Quarterly Decline in Learning Device Revenue
Revenue from learning devices declined quarter-over-quarter, attributed to normal seasonality, despite year-over-year growth.
Investment Phase in Learning Devices
The learning devices business recorded a non-GAAP operating loss, indicating continued investment is required to reach profitability.
Company Guidance
During the fiscal 2026 first quarter earnings call, TAL Education Group reported a net revenue of USD 575 million, reflecting a year-over-year growth of 38.8% in USD terms and 39.4% in RMB terms. The company achieved a gross profit of USD 315.4 million, marking a 47.3% increase from the previous year, with a gross margin rising to 54.9%. Non-GAAP operating income reached USD 25.1 million, while net income attributable to TAL was USD 42 million. The Peiyou Small Class Enrichment programs reported a retention rate of around 80%, and the average weekly active rate across TAL's learning device user base was approximately 80%, with an average daily usage time of one hour. Additionally, TAL launched three new learning devices—P4, S4, and T4—in May, aiming to cater to diverse user needs and expand their market reach. The company also extended its share repurchase program, with a new authorization to spend up to USD 600 million over the next 12 months.TAL Education Group Financial Statement Overview
Summary
TAL Education Group has shown significant financial recovery with improved revenue, a return to profitability, and strong cash flow generation. However, challenges remain in operational efficiency and debt management.Income Statement
TAL Education Group has shown a significant improvement in revenue from $1.49 billion in 2024 to $2.25 billion in 2025, marking a strong recovery trajectory. Gross Profit Margin improved from 54.1% in 2024 to 53.3% in 2025. The Net Profit Margin turned positive to 3.76% in 2025 from a negative margin in 2024, indicating enhanced profitability. However, EBIT and EBITDA margins remain low, signaling ongoing operational challenges.75
Positive
Balance Sheet
The company's balance sheet is stable with a strong equity position, as the Equity Ratio improved to 68.4% in 2025, reflecting financial stability. The Debt-to-Equity ratio decreased, indicating reduced leverage. ROE turned positive at 2.25% in 2025, showing improved returns to shareholders. Despite these strengths, high liabilities relative to total assets could pose future risks.70
Positive
Cash Flow
The cash flow statement highlights a robust improvement, with Free Cash Flow growing by 54.5% from 2024 to 2025. Operating Cash Flow to Net Income ratio is healthy at 4.70, indicating efficient cash conversion. The Free Cash Flow to Net Income ratio is strong at 3.38, reflecting solid cash flow generation. These factors contribute to a positive liquidity outlook.80
Positive
| Breakdown | TTM | Dec 2025 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2019 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.41B | 2.25B | 1.02B | 4.39B | 4.50B | 2.56B |
| Gross Profit | 1.30B | 1.20B | 583.41M | 2.19B | 2.45B | 1.40B |
| EBITDA | 131.72M | 132.11M | -73.27M | -580.40M | -46.69M | 430.42M |
| Net Income | 104.55M | 84.59M | -135.61M | -1.14B | -115.99M | 367.24M |
Balance Sheet | ||||||
| Total Assets | 5.72B | 5.50B | 4.72B | 5.08B | 12.11B | 3.74B |
| Cash, Cash Equivalents and Short-Term Investments | 3.73B | 3.62B | 3.17B | 2.71B | 5.94B | 1.52B |
| Total Debt | 373.84M | 333.35M | 157.72M | 242.09M | 4.15B | 215.30M |
| Total Liabilities | 2.14B | 1.74B | 903.44M | 1.08B | 6.91B | 1.20B |
| Stockholders Equity | 3.57B | 3.77B | 3.84B | 4.03B | 5.20B | 2.48B |
Cash Flow | ||||||
| Free Cash Flow | 498.92M | 285.66M | -102.97M | -1.19B | 708.99M | -160.65M |
| Operating Cash Flow | 498.92M | 397.92M | 7.36M | -939.18M | 954.73M | 194.36M |
| Investing Cash Flow | -1.25B | -847.03M | -301.63M | 1.37B | -2.64B | -166.58M |
| Financing Cash Flow | -267.28M | -13.17M | -66.18M | -2.77B | 4.79B | 475.02M |
TAL Education Group Technical Analysis
Positive
11.09
Price Trends
10.95
Positive
10.72
Positive
11.14
Negative
Market Momentum
-0.05
Positive
51.44
Neutral
61.10
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TAL, the sentiment is Positive. The current price of 11.09 is above the 20-day moving average (MA) of 11.00, above the 50-day MA of 10.95, and below the 200-day MA of 11.14, indicating a neutral trend. The MACD of -0.05 indicates Positive momentum. The RSI at 51.44 is Neutral, neither overbought nor oversold. The STOCH value of 61.10 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TAL.
TAL Education Group Risk Analysis
TAL Education Group disclosed 85 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
UnderperformOutperform
Sector (62)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $4.33B | 17.31 | 25.81% | ― | 0.44% | 35.19% | |
77 Outperform | $5.85B | 25.26 | 30.77% | ― | 6.52% | 11.72% | |
75 Outperform | $6.68B | 64.63 | 2.88% | ― | 48.03% | 97.15% | |
74 Outperform | $5.36B | 23.83 | 16.60% | ― | 12.85% | 81.69% | |
73 Outperform | $9.62B | 24.51 | 10.03% | 1.16% | 13.86% | 21.74% | |
71 Outperform | $6.14B | 23.38 | 21.69% | ― | 17.90% | 39.75% | |
62 Neutral | $20.33B | 14.63 | -3.31% | 3.23% | 1.93% | -12.26% |
* Consumer Defensive Sector Average
TAL
TAL Education Group
11.09
0.71
6.84%
ATGE
Adtalem Global Education
151.33
78.28
107.16%
LOPE
Grand Canyon Education
211.60
79.46
60.13%
LRN
Stride
144.95
80.43
124.66%
EDU
New Oriental Education Tech
56.83
-12.93
-18.53%
LAUR
Laureate Education
29.37
13.54
85.53%
TAL Education Group Corporate Events
TAL Education Group Reports Strong Q1 2026 Financial Results and New Share Repurchase Plan
Jul 31, 2025
TAL Education Group announced its unaudited financial results for the first fiscal quarter ended May 31, 2025, showing significant growth. The company reported a 38.8% increase in net revenues to $575 million and a turnaround in operating income to $14.3 million from a loss of $17.3 million in the same period last year. This growth was driven by the successful launch of new learning device models and a focus on enhancing learning experiences. The board also authorized a new share repurchase plan, allowing the company to buy back up to $600 million of its shares, reflecting confidence in its financial health and future prospects.
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.