NYSE:TAL

Stock Analysis Report

Executive Summary

TAL Education Group provides K-12 after-school tutoring services in the People’s Republic of China.

Rewards

Trading at 29.2% below its fair value

Earnings are forecast to grow 66.03% per year

Risk Analysis

High level of non-cash earnings

Highly volatile share price over past 3 months

Profit margins (6.8%) are lower than last year (11.6%)

Shareholders have been diluted in the past year



Snowflake Analysis

Exceptional growth potential with flawless balance sheet.


Similar Companies

Share Price & News

How has TAL Education Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: TAL's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

1.4%

TAL

0.4%

US Consumer Services

0.7%

US Market


1 Year Return

69.7%

TAL

26.9%

US Consumer Services

18.2%

US Market

Return vs Industry: TAL exceeded the US Consumer Services industry which returned 26.9% over the past year.

Return vs Market: TAL exceeded the US Market which returned 18.2% over the past year.


Shareholder returns

TALIndustryMarket
7 Day1.4%0.4%0.7%
30 Day2.0%2.8%1.5%
90 Day32.3%4.8%5.0%
1 Year69.7%69.7%27.6%26.9%20.8%18.2%
3 Year280.8%279.3%102.2%91.0%45.2%35.8%
5 Year839.6%835.9%143.0%115.7%71.6%52.7%

Price Volatility Vs. Market

How volatile is TAL Education Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is TAL Education Group undervalued compared to its fair value and its price relative to the market?

29.2%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: TAL ($45.47) is trading below our estimate of fair value ($64.18)

Significantly Below Fair Value: TAL is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: TAL is poor value based on its PE Ratio (131.2x) compared to the Consumer Services industry average (28.9x).

PE vs Market: TAL is poor value based on its PE Ratio (131.2x) compared to the US market (18.5x).


Price to Earnings Growth Ratio

PEG Ratio: TAL is poor value based on its PEG Ratio (2x)


Price to Book Ratio

PB vs Industry: TAL is overvalued based on its PB Ratio (10.7x) compared to the US Consumer Services industry average (2.2x).


Next Steps

Future Growth

How is TAL Education Group forecast to perform in the next 1 to 3 years based on estimates from 24 analysts?

66.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: TAL's forecast earnings growth (66% per year) is above the savings rate (1.7%).

Earnings vs Market: TAL's earnings (66% per year) are forecast to grow faster than the US market (14.2% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: TAL's revenue (31.9% per year) is forecast to grow faster than the US market (7.4% per year).

High Growth Revenue: TAL's revenue (31.9% per year) is forecast to grow faster than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: TAL's Return on Equity is forecast to be high in 3 years time (21.5%)


Next Steps

Past Performance

How has TAL Education Group performed over the past 5 years?

32.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: TAL has a high level of non-cash earnings.

Growing Profit Margin: TAL's current net profit margins (6.8%) are lower than last year (11.6%).


Past Earnings Growth Analysis

Earnings Trend: TAL's earnings have grown significantly by 32.3% per year over the past 5 years.

Accelerating Growth: TAL's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: TAL had negative earnings growth (-20.6%) over the past year, making it difficult to compare to the Consumer Services industry average (7.1%).


Return on Equity

High ROE: TAL's Return on Equity (7.6%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is TAL Education Group's financial position?


Financial Position Analysis

Short Term Liabilities: TAL's short term assets ($1.8B) exceed its short term liabilities ($1.3B).

Long Term Liabilities: TAL's short term assets ($1.8B) exceed its long term liabilities ($833.4M).


Debt to Equity History and Analysis

Debt Level: TAL is debt free.

Reducing Debt: TAL has no debt compared to 5 years ago when its debt to equity ratio was 78.1%.

Debt Coverage: TAL has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: TAL has no debt, therefore coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: TAL has a high level of physical assets or inventory.

Debt Coverage by Assets: Insufficient data to determine if TAL's debt is covered by short term assets.


Next Steps

Dividend

What is TAL Education Group's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

company0%marketbottom25%1.4%markettop25%3.7%industryaverage2.1%forecastin3Years0%

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate TAL's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate TAL's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if TAL's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if TAL's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: TAL is not paying a notable dividend for the US market.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of TAL's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

What is the CEO of TAL Education Group's salary, the management and board of directors tenure and is there insider trading?

3.2yrs

Average management tenure


CEO

Tom Zhang (38yo)

16.9yrs

Tenure

0

Mr. Bangxin Zhang, also known as Tom, co-founded TAL Education Group in 2003 and has been its Chairman and Chief Executive Officer since 2003. Mr. Zhang is instrumental to the development and success of TA ...


Management Age and Tenure

3.2yrs

Average Tenure

37yo

Average Age

Experienced Management: TAL's management team is considered experienced (3.2 years average tenure).


Board Age and Tenure

4.5yrs

Average Tenure

38yo

Average Age

Experienced Board: TAL's board of directors are considered experienced (4.5 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 5.1%.


Management Team

  • Tom Zhang (38yo)

    Co-Founder

    • Tenure: 16.9yrs
  • Yachao Liu (37yo)

    COO & Director

    • Tenure: 3.2yrs
  • Yunfeng Bai (37yo)

    President

    • Tenure: 3.2yrs
  • Julius Luo (37yo)

    Chief Financial Officer

    • Tenure: 5.1yrs
  • Yan Huang (35yo)

    Chief Technology Officer

    • Tenure: 3.2yrs
  • Echo Yan

    Head of Investor Relations

    • Tenure: 1.9yrs
  • Linda Huo

    Vice President of Finance

    • Tenure: 0yrs

Board Members

  • Jane Jie Sun (50yo)

    Independent Director

    • Tenure: 9.2yrs
  • Tom Zhang (38yo)

    Co-Founder

    • Tenure: 16.9yrs
  • Yachao Liu (37yo)

    COO & Director

    • Tenure: 3.2yrs
  • Weiru Chen (48yo)

    Independent Director

    • Tenure: 4.5yrs
  • Kaifu Zhang (34yo)

    Independent Director

    • Tenure: 3.2yrs

Company Information

TAL Education Group's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: TAL Education Group
  • Ticker: TAL
  • Exchange: NYSE
  • Founded: 2003
  • Industry: Education Services
  • Sector: Consumer Services
  • Market Cap: US$26.907b
  • Shares outstanding: 591.74m
  • Website: https://en.100tal.com

Number of Employees


Location

  • TAL Education Group
  • Danling SOHO
  • 15th Floor
  • Beijing
  • 100080
  • China

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
TALNYSE (New York Stock Exchange)YesADS EA REPR 2 CL A ORD SHSUSUSDOct 2010
IZZDB (Deutsche Boerse AG)YesADS EA REPR 2 CL A ORD SHSDEEUROct 2010
0A2XLSE (London Stock Exchange)YesADS EA REPR 2 CL A ORD SHSGBUSDOct 2010

Biography

TAL 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 mathe ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/10 00:20
End of Day Share Price2019/12/09 00:00
Earnings2019/08/31
Annual Earnings2019/02/28


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.