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TAL Education Group (TAL)
NYSE:TAL
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TAL Education Group
(NYSE:TAL)
Rating:67Neutral
Price Target:
$12.00
▲(8.30% Upside)
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.
Revenue Growth
Revenue is projected to grow 39%, signaling strong business performance.
Share Repurchase Program
The company newly announced USD600mn share repurchase program for the coming fiscal year, which offers further support to share price.
Negative Factors
Earnings Miss
Both earnings and revenue missed the expectations, triggering a share price correction.
Operating Margin Pressure
There is an expectation of ongoing operating margin pressure due to continued investments in selling and marketing activities.
Pricing Competition
Stiff pricing competition may impact revenue growth and margins.
TAL Education Group (TAL) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$6.97B
Dividend YieldN/A
Average Volume (3M)5.44M
Price to Earnings (P/E)67.4
Beta (1Y)0.44
Revenue Growth48.08%
EPS Growth97.15%
CountryUS
Employees15,000
SectorConsumer Defensive
Sector Strength68
IndustryEducation & Training Services
Share Statistics
EPS (TTM)0.05
Shares Outstanding458,101,780
10 Day Avg. Volume6,753,745
30 Day Avg. Volume5,438,085
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)0.00
Price to Sales (P/S)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap0.39
Enterprise Value/Revenue1.30
Enterprise Value/Gross Profit2.42
Enterprise Value/Ebitda45.43
Forecast
1Y Price Target
$12.25Price Target Upside10.56% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering5
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: 9.81%|
Next Earnings Date:Oct 23, 2025
Earnings Call Sentiment Positive
The earnings call reflects a strong financial performance with significant revenue growth and positive operating income. The company has made strategic advancements in expanding its product lineup and achieving high retention rates in its core businesses. However, increased expenses in sales and marketing and the investment phase losses in the learning devices business present challenges. Overall, the positive aspects outweigh the challenges.Q1-2026 Updates
Positive Updates
Significant Revenue Growth
TAL Education Group recorded net revenues of USD 575 million or RMB 4.2 billion, reflecting year-over-year growth of 38.8% in USD and 39.4% in RMB.
Positive Operating Income
The company achieved positive operating income of USD 14.3 million in Q1 FY2026, compared to a loss from operations of USD 17.3 million in the same period last year.
Strong Performance in Learning Devices
Learning devices business saw continued year-over-year revenue growth, driven by product optimization, enhanced user experience, and strengthened sales channels.
Retention in Peiyou Small Class
The retention rate for Peiyou Small Class stood at around 80% this quarter.
Expansion of Product Lineup
In May, TAL launched three new learning device models, further enriching their portfolio to cater to diverse user needs.
Negative Updates
Increased Selling and Marketing Expenses
Selling and marketing expenses for the quarter increased by 47.7% to USD 180.8 million, with non-GAAP selling and marketing expenses increasing by 50.5% year-over-year.
Quarterly Loss in Learning Devices Business
The learning devices business recorded a non-GAAP operating loss this quarter, as it remains in an investment phase.
Quarterly Revenue Seasonality
Q1 is typically a low season for the learning device business, resulting in a quarter-over-quarter revenue decline.
Company Guidance
During the first quarter of fiscal year 2026, TAL Education Group provided guidance reflecting strong financial performance and strategic progress. The company reported net revenues of USD 575 million, a year-over-year increase of 38.8%, and a non-GAAP net income attributable to TAL of USD 42 million. The Peiyou Small Class Enrichment programs maintained a retention rate of around 80%, while the online enrichment learning business saw continued innovation. Learning devices also experienced year-over-year revenue growth, with the release of three new models in May, including the P4, S4, and T4, which enriched the product lineup and expanded the user base. The average weekly active rate for learning devices was around 80%, with daily usage averaging one hour per active device. The company also reported improvements in gross margin, which increased to 54.9% from 51.7% year-over-year. Operating expenses rose, with selling and marketing expenses at USD 180.8 million, up 47.7% from the previous year, and general and administrative expenses increased by 10.4% to USD 121.1 million. The company remains focused on strategic priorities, including expanding its learning center network, enhancing product quality, and leveraging AI and technology to innovate in the K-12 learning sector.TAL Education Group Financial Statement Overview
Summary
TAL Education Group has demonstrated significant financial recovery and improvement across key financial metrics. The income statement shows a return to profitability, the balance sheet reflects reduced leverage and a strong equity position, and cash flows indicate efficient cash generation. However, operational efficiency and debt management remain challenges.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 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.07B | 2.25B | 1.49B | 1.02B | 4.39B | 4.50B |
| Gross Profit | 1.11B | 1.20B | 806.12M | 583.41M | 2.19B | 2.45B |
| EBITDA | 59.08M | 132.11M | 42.59M | -73.27M | -614.52M | -46.69M |
| Net Income | 119.41M | 84.59M | -3.57M | -129.73M | -1.18B | -154.73M |
Balance Sheet | ||||||
| Total Assets | 5.79B | 5.50B | 4.93B | 4.72B | 5.08B | 12.11B |
| Cash, Cash Equivalents and Short-Term Investments | 3.84B | 3.62B | 3.30B | 3.17B | 2.71B | 5.94B |
| Total Debt | 381.09M | 333.35M | 239.22M | 157.72M | 242.09M | 4.15B |
| Total Liabilities | 2.03B | 1.74B | 1.29B | 903.44M | 1.08B | 6.91B |
| Stockholders Equity | 3.77B | 3.77B | 3.66B | 3.84B | 4.03B | 5.20B |
Cash Flow | ||||||
| Free Cash Flow | 487.77M | 285.66M | 184.88M | -102.97M | -1.19B | 708.99M |
| Operating Cash Flow | 600.51M | 397.92M | 306.17M | 7.36M | -939.18M | 954.73M |
| Investing Cash Flow | -571.63M | -847.03M | 95.07M | -301.63M | 1.37B | -2.64B |
| Financing Cash Flow | 42.14M | -13.17M | -233.09M | -66.18M | -2.77B | 4.79B |
TAL Education Group Technical Analysis
Positive
11.08
Price Trends
10.55
Positive
10.68
Positive
11.01
Positive
Market Momentum
0.22
Negative
56.55
Neutral
88.41
Negative
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 11.08 is above the 20-day moving average (MA) of 10.66, above the 50-day MA of 10.55, and above the 200-day MA of 11.01, indicating a bullish trend. The MACD of 0.22 indicates Negative momentum. The RSI at 56.55 is Neutral, neither overbought nor oversold. The STOCH value of 88.41 is Negative, 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
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $5.57B | 24.03 | 30.77% | ― | 6.52% | 11.72% | |
77 Outperform | $6.56B | 25.00 | 21.69% | ― | 17.90% | 39.75% | |
73 Outperform | $7.50B | 20.21 | 10.00% | 1.27% | 13.72% | 21.23% | |
67 Neutral | $6.97B | 67.39 | 2.88% | ― | 48.08% | 97.15% | |
63 Neutral | $20.96B | 13.61 | -6.24% | 3.13% | 3.51% | -6.37% | |
55 Neutral | $1.05B | 51.41 | 25.15% | ― | -2.04% | ― | |
54 Neutral | $889.23M | ― | -36.29% | ― | 58.34% | -602.43% |
* Consumer Defensive Sector Average
Performance Comparison
TAL
TAL Education Group
11.08
1.90
20.70%
LOPE
Grand Canyon Education
195.79
52.78
36.91%
LRN
Stride
150.43
68.07
82.65%
EDU
New Oriental Education Tech
45.60
-23.36
-33.87%
GOTU
Gaotu Techedu
3.73
-0.89
-19.26%
DAO
Youdao
8.79
5.43
161.61%
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.