TAL Education Group (TAL) AI Stock Analysis

• Market Cap: $6.64B
• Dividend Yield: N/A
• Average Volume (3M): 4.35M
• Price to Earnings (P/E): 22.4
• Beta (1Y): 0.59
• Revenue Growth: 44.37%
• EPS Growth: 146.96%
• Country: US
• Employees: 15,000
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Education & Training Services
• EPS (TTM): 0.25
• Shares Outstanding: 460,861,500
• 10 Day Avg. Volume: 3,241,831
• 30 Day Avg. Volume: 4,346,474
• PEG Ratio: >-0.01
• Price to Book (P/B): 0.23
• Price to Sales (P/S): 0.39
• P/FCF Ratio: 3.06
• Enterprise Value/Market Cap: 0.73
• Enterprise Value/Revenue: 1.83
• Enterprise Value/Gross Profit: 3.37
• Enterprise Value/Ebitda: 28.15
• 1Y Price Target: $15.31
• Price Target Upside: 39.82% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 70 Outperform
• Price Target: $12.00 ▲(9.59% Upside)
• Action: Upgraded Date: 01/30/26
• Date: Action: Upgraded 01/30/26

The score is driven primarily by improving fundamentals (revenue growth, better profitability, strong balance sheet) and supportive technical uptrend. This is tempered by a premium valuation (high P/E, no dividend) and earnings-call risks around moderating growth visibility and ongoing losses in the investment-phase learning device segment.

Positive Factors

Revenue & Margin Expansion

Sustained double-digit top-line growth coupled with a multi-percentage-point gross margin expansion signals scalable unit economics and improved product mix. Over 2–6 months this provides durable operating leverage potential and stronger cash conversion assuming continued demand and content scalability.

Strong Liquidity & Low Leverage

Very large liquid reserves and robust operating cash generation, combined with a low debt-to-equity profile, give the company flexibility to fund investment-stage businesses, absorb seasonal swings, and pursue buybacks or strategic spending without jeopardizing operations over the medium term.

Improving Efficiency & High Engagement

Lowered sales and G&A intensity demonstrates disciplined cost structure and scaled operations, while strong device engagement and AI activations indicate sticky user behavior and differentiated content/tech. Together these support durable retention, content monetization and margin resilience.

Negative Factors

Loss-Making Device Segment

The device business is structurally still investment-heavy and loss-making, requiring ongoing capex and content costs. Persistent losses in this unit can depress consolidated margins and divert cash and management focus for multiple quarters unless clear path to breakeven emerges.

Decelerating Device Growth & ASP Pressure

Slowing unit growth and lower average selling prices reflect shifting product mix or competitive pricing. Over several months this can impair revenue growth scalability and reduce gross margin contribution from devices, limiting the company's ability to offset slower growth in other segments.

Margin Volatility & Limited Near-Term Visibility

Quarterly margin gains appear partly driven by timing-related lower marketing spend. If marketing normalization or competitive pressure resumes, margins could revert. Combined with management's limited short-term visibility, this raises medium-term predictability risk for profits and planning.

TAL Education Group Business Overview & Revenue Model

Company Description

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 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 Money

TAL Education Group generates revenue primarily through its tutoring services, which include both in-person and online classes. The company charges tuition fees for these courses, which vary based on factors such as the subject matter, class size, and duration. A significant portion of TAL's income comes from its online education platforms, which have gained popularity due to their flexibility and accessibility. Additionally, TAL develops and sells educational content and learning materials, further contributing to its revenue. The company has established partnerships with various educational institutions and technology providers, enhancing its service offerings and expanding its reach in the competitive education market. Factors such as the growing demand for quality education in China and a focus on technological innovation have also played a critical role in driving TAL's earnings.

TAL Education Group Financial Statement Overview

Summary

Income statement shows recovery with 10.03% TTM revenue growth and a 54.42% gross margin, but EBIT/EBITDA margins remain modest (5.01%/6.51%). Balance sheet is conservative with low leverage (debt-to-equity 0.11) and a strong equity ratio (63.03%), though ROE is still relatively low (4.71%). Cash flow is mixed: free cash flow growth declined (-11.53%), offset by adequate cash generation relative to net income.

Income Statement

TAL Education Group has shown a strong recovery in its income statement metrics. The TTM data indicates a significant revenue growth rate of 10.03%, with a healthy gross profit margin of 54.42%. The net profit margin has improved to 6.45%, indicating enhanced profitability. However, the EBIT and EBITDA margins are relatively modest at 5.01% and 6.51%, respectively, suggesting room for operational efficiency improvements.

Balance Sheet

The balance sheet reflects a stable financial position with a low debt-to-equity ratio of 0.11, indicating conservative leverage. The return on equity (ROE) has improved to 4.71%, showing better utilization of equity. The equity ratio stands at 63.03%, highlighting a strong equity base. However, the company should continue to focus on improving its ROE to enhance shareholder value.

Cash Flow

Cash flow analysis reveals a decline in free cash flow growth by 11.53% in the TTM period, which is a concern. However, the operating cash flow to net income ratio is 0.26, and the free cash flow to net income ratio is 1.0, indicating that the company is generating sufficient cash relative to its net income. Continued focus on cash flow management will be crucial for sustaining operations and growth.

Breakdown	TTM	Feb 2025	Feb 2024	Feb 2023	Feb 2022	Feb 2021
Income Statement
Total Revenue	2.65B	2.25B	1.49B	1.02B	4.39B	4.50B
Gross Profit	1.44B	1.20B	806.12M	583.41M	2.19B	2.45B
EBITDA	172.72M	184.41M	-39.36M	-73.27M	-580.40M	-46.69M
Net Income	171.21M	84.59M	-3.57M	-135.61M	-1.14B	-115.99M
Balance Sheet
Total Assets	5.45B	5.50B	4.93B	4.72B	5.08B	12.11B
Cash, Cash Equivalents and Short-Term Investments	3.25B	3.62B	3.30B	3.17B	2.71B	5.94B
Total Debt	373.33M	333.35M	239.22M	157.72M	242.09M	4.15B
Total Liabilities	2.02B	1.74B	1.29B	903.44M	1.08B	6.91B
Stockholders Equity	3.44B	3.77B	3.66B	3.84B	4.03B	5.20B
Cash Flow
Free Cash Flow	441.40M	285.66M	184.88M	-102.97M	-1.19B	708.99M
Operating Cash Flow	441.40M	397.92M	306.17M	7.36M	-939.18M	954.73M
Investing Cash Flow	-492.70M	-847.03M	95.07M	-301.63M	1.37B	-2.64B
Financing Cash Flow	-542.36M	-13.17M	-233.09M	-66.18M	-2.77B	4.79B

TAL Education Group Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 10.95
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 10.95 is below the 20-day moving average (MA) of 11.59, below the 50-day MA of 11.36, and below the 200-day MA of 11.01, indicating a bearish trend. The MACD of -0.09 indicates Positive momentum. The RSI at 43.43 is Neutral, neither overbought nor oversold. The STOCH value of 10.95 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TAL.

TAL Education Group Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
EDU	78 Outperform	$9.70B	25.10	10.05%	1.03%	7.22%	-2.84%
LRN	76 Outperform	$3.59B	12.62	22.26%	―	17.25%	30.15%
LOPE	73 Outperform	$4.69B	20.03	28.24%	―	7.05%	-2.63%
ATGE	71 Outperform	$3.37B	14.25	17.92%	―	12.24%	52.97%
LAUR	71 Outperform	$5.17B	24.88	26.23%	―	2.01%	-13.82%
TAL	70 Outperform	$6.64B	22.41	7.68%	―	44.37%	146.96%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%

TAL Education Group Corporate Events

TAL Education Posts Strong Q3 2026 Profit Surge as Revenues Climb 27%

On January 29, 2026, TAL Education Group reported unaudited results for its third fiscal quarter ended November 30, 2025, showing a sharp rebound in profitability driven by strong top-line growth and tighter cost controls. Quarterly net revenues rose 27% year on year to US$770.2 million, while the company swung from a US$17.4 million operating loss a year earlier to operating income of US$93.1 million, with non-GAAP operating income reaching US$104.0 million. Net income attributable to TAL surged to US$130.6 million from US$23.1 million, and non-GAAP net income climbed to US$141.4 million, supported by robust margin expansion as selling and marketing expenses declined and revenue scale improved, even as cost of revenues and general and administrative expenses grew. For the nine months ended November 30, 2025, net revenues increased 34.5% to US$2.21 billion and operating income soared to US$203.6 million from US$12.9 million, with net income more than tripling to US$286.0 million, signalling that TAL’s post-restructuring smart-learning strategy and emphasis on technology integration are strengthening its financial footing and competitive positioning in China’s education market while preserving a sizeable US$3.62 billion cash and short-term investment balance.

The most recent analyst rating on (TAL) stock is a Hold with a $11.50 price target. To see the full list of analyst forecasts on TAL Education Group stock, see the TAL Stock Forecast page.