In a report released today, Lucy Yu from Bank of America Securities maintained a Buy rating on TAL Education Group, with a price target of $12.50.
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Lucy Yu’s rating is based on TAL Education Group’s impressive financial performance and strategic initiatives. The company’s revenue growth of 38.8% year-over-year in USD terms, alongside a positive shift in non-GAAP operating profit margin to 4.4%, highlights its strong operational recovery. Despite a competitive market, TAL’s revenue growth outpaces its peers, partly due to a lower base effect.
Furthermore, the announcement of a USD 600 million share repurchase program, which represents about 10% of its current market capitalization, provides additional support to the stock price. The company’s focus on expanding its learning device offerings and improving profitability through better utilization of learning centers also contributes to its positive outlook. These factors, combined with a high earnings beta due to a low margin base, underpin Lucy Yu’s Buy rating for TAL Education Group.