TAL EDUCATION GROUP- ADR (TAL) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:TAL - US8740801043 - ADR
10.715 USD
-0.06 (-0.6%)
TAL gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 76 industry peers in the Diversified Consumer Services industry. No worries on liquidiy or solvency for TAL as it has an excellent financial health rating, but there are worries on the profitability. TAL has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
- In the past year TAL was profitable.
- TAL had a positive operating cash flow in the past year.
- TAL had negative earnings in 4 of the past 5 years.
- TAL had a positive operating cash flow in 4 of the past 5 years.
1.2 Ratios
- TAL's Return On Assets of 3.14% is in line compared to the rest of the industry. TAL outperforms 59.21% of its industry peers.
- Looking at the Return On Equity, with a value of 4.98%, TAL is in line with its industry, outperforming 56.58% of the companies in the same industry.
- TAL has a Return On Invested Capital of 1.62%. This is comparable to the rest of the industry: TAL outperforms 53.95% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.14% | ||
| ROE | 4.98% | ||
| ROIC | 1.62% |
ROA(3y)-0.47%
ROA(5y)-4.94%
ROE(3y)-0.46%
ROE(5y)-6.36%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
- With a decent Profit Margin value of 6.45%, TAL is doing good in the industry, outperforming 63.16% of the companies in the same industry.
- The Operating Margin of TAL (2.90%) is comparable to the rest of the industry.
- With a decent Gross Margin value of 54.42%, TAL is doing good in the industry, outperforming 68.42% of the companies in the same industry.
- In the last couple of years the Gross Margin of TAL has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 2.9% | ||
| PM (TTM) | 6.45% | ||
| GM | 54.42% |
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y2.3%
GM growth 5Y-0.66%
2. Health
2.1 Basic Checks
- TAL has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
- The number of shares outstanding for TAL has been reduced compared to 1 year ago.
- TAL has more shares outstanding than it did 5 years ago.
- There is no outstanding debt for TAL. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
2.2 Solvency
- TAL has an Altman-Z score of 2.87. This is not the best score and indicates that TAL is in the grey zone with still only limited risk for bankruptcy at the moment.
- TAL has a better Altman-Z score (2.87) than 71.05% of its industry peers.
- TAL has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Altman-Z | 2.87 |
ROIC/WACC0.21
WACC7.54%
2.3 Liquidity
- TAL has a Current Ratio of 2.28. This indicates that TAL is financially healthy and has no problem in meeting its short term obligations.
- Looking at the Current ratio, with a value of 2.28, TAL is in the better half of the industry, outperforming 78.95% of the companies in the same industry.
- A Quick Ratio of 2.20 indicates that TAL has no problem at all paying its short term obligations.
- TAL has a better Quick ratio (2.20) than 78.95% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.28 | ||
| Quick Ratio | 2.2 |
3. Growth
3.1 Past
- TAL shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 52.00%, which is quite impressive.
- The Revenue has grown by 44.45% in the past year. This is a very strong growth!
- Measured over the past years, TAL shows a decrease in Revenue. The Revenue has been decreasing by -7.22% on average per year.
EPS 1Y (TTM)52%
EPS 3YN/A
EPS 5YN/A
EPS Q2Q%100%
Revenue 1Y (TTM)44.45%
Revenue growth 3Y-19.98%
Revenue growth 5Y-7.22%
Sales Q2Q%39.07%
3.2 Future
- Based on estimates for the next years, TAL will show a very strong growth in Earnings Per Share. The EPS will grow by 59.59% on average per year.
- Based on estimates for the next years, TAL will show a quite strong growth in Revenue. The Revenue will grow by 18.00% on average per year.
EPS Next Y93.48%
EPS Next 2Y60.2%
EPS Next 3Y50.44%
EPS Next 5Y59.59%
Revenue Next Year33.71%
Revenue Next 2Y28.94%
Revenue Next 3Y25.73%
Revenue Next 5Y18%
3.3 Evolution
- The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
- A Price/Earnings ratio of 28.20 indicates a quite expensive valuation of TAL.
- TAL's Price/Earnings ratio is in line with the industry average.
- TAL is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 27.25, which is the current average of the S&P500 Index.
- The Price/Forward Earnings ratio is 17.40, which indicates a rather expensive current valuation of TAL.
- 65.79% of the companies in the same industry are more expensive than TAL, based on the Price/Forward Earnings ratio.
- When comparing the Price/Forward Earnings ratio of TAL to the average of the S&P500 Index (25.98), we can say TAL is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.2 | ||
| Fwd PE | 17.4 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of TAL is on the same level as its industry peers.
- TAL's Price/Free Cash Flow ratio is rather cheap when compared to the industry. TAL is cheaper than 92.11% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 9.21 | ||
| EV/EBITDA | 12.46 |
4.3 Compensation for Growth
- TAL's low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
- A more expensive valuation may be justified as TAL's earnings are expected to grow with 50.44% in the coming years.
PEG (NY)0.3
PEG (5Y)N/A
EPS Next 2Y60.2%
EPS Next 3Y50.44%
5. Dividend
5.1 Amount
- No dividends for TAL!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
TAL EDUCATION GROUP- ADR / TAL FAQ
What is the ChartMill fundamental rating of TAL EDUCATION GROUP- ADR (TAL) stock?
ChartMill assigns a fundamental rating of 5 / 10 to TAL.
Can you provide the valuation status for TAL EDUCATION GROUP- ADR?
ChartMill assigns a valuation rating of 5 / 10 to TAL EDUCATION GROUP- ADR (TAL). This can be considered as Fairly Valued.
How profitable is TAL EDUCATION GROUP- ADR (TAL) stock?
TAL EDUCATION GROUP- ADR (TAL) has a profitability rating of 3 / 10.
What is the earnings growth outlook for TAL EDUCATION GROUP- ADR?
The Earnings per Share (EPS) of TAL EDUCATION GROUP- ADR (TAL) is expected to grow by 93.48% in the next year.
Can you provide the dividend sustainability for TAL stock?
The dividend rating of TAL EDUCATION GROUP- ADR (TAL) is 0 / 10 and the dividend payout ratio is -38.57%.