TAL EDUCATION GROUP- ADR (TAL) Stock Fundamental Analysis
NYSE:TAL - New York Stock Exchange, Inc. - US8740801043 - ADR - Currency: USD
TAL gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 71 industry peers in the Diversified Consumer Services industry. TAL may be in some trouble as it scores bad on both profitability and health. TAL is showing excellent growth while it is valued at reasonable prices. Keep and eye on this one!
1. Profitability
1.1 Basic Checks
TAL had positive earnings in the past year.
In the past year TAL had a positive cash flow from operations.
In the past 5 years TAL reported 4 times negative net income.
Of the past 5 years TAL 4 years had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 1.11%, TAL is in line with its industry, outperforming 51.56% of the companies in the same industry.
TAL has a Return On Equity (4.92%) which is comparable to the rest of the industry.
With a Return On Invested Capital value of 2.29%, TAL perfoms like the industry average, outperforming 54.69% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.11% | ||
| ROE | 4.92% | ||
| ROIC | 2.29% |
ROA(3y)-7.73%
ROA(5y)-5.22%
ROE(3y)-7.65%
ROE(5y)-5.91%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
With a Profit Margin value of 3.98%, TAL perfoms like the industry average, outperforming 59.38% of the companies in the same industry.
In the last couple of years the Profit Margin of TAL has declined.
The Operating Margin of TAL (5.73%) is comparable to the rest of the industry.
TAL's Operating Margin has declined in the last couple of years.
With a Gross Margin value of 22.47%, TAL is not doing good in the industry: 87.50% of the companies in the same industry are doing better.
TAL's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 5.73% | ||
| PM (TTM) | 3.98% | ||
| GM | 22.47% |
OM growth 3YN/A
OM growth 5Y-13.17%
PM growth 3YN/A
PM growth 5Y-22.37%
GM growth 3Y-29.57%
GM growth 5Y-19.01%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so TAL is destroying value.
The number of shares outstanding for TAL has been reduced compared to 1 year ago.
The number of shares outstanding for TAL has been reduced compared to 5 years ago.
The debt/assets ratio for TAL is higher compared to a year ago.
2.2 Solvency
TAL has an Altman-Z score of 1.11. This is a bad value and indicates that TAL is not financially healthy and even has some risk of bankruptcy.
TAL has a Altman-Z score (1.11) which is comparable to the rest of the industry.
The Debt to FCF ratio of TAL is 43.91, which is on the high side as it means it would take TAL, 43.91 years of fcf income to pay off all of its debts.
TAL has a Debt to FCF ratio (43.91) which is comparable to the rest of the industry.
A Debt/Equity ratio of 1.03 is on the high side and indicates that TAL has dependencies on debt financing.
TAL has a worse Debt to Equity ratio (1.03) than 71.88% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.03 | ||
| Debt/FCF | 43.91 | ||
| Altman-Z | 1.11 |
ROIC/WACC0.33
WACC7%
2.3 Liquidity
A Current Ratio of 1.52 indicates that TAL should not have too much problems paying its short term obligations.
With a Current ratio value of 1.52, TAL perfoms like the industry average, outperforming 54.69% of the companies in the same industry.
TAL has a Quick Ratio of 1.52. This is a bad value and indicates that TAL is not financially healthy enough and could expect problems in meeting its short term obligations.
TAL's Quick ratio of 0.27 is on the low side compared to the rest of the industry. TAL is outperformed by 93.75% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.52 | ||
| Quick Ratio | 0.27 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 520.00% over the past year.
The earnings per share for TAL have been decreasing by -24.71% on average. This is quite bad
The Revenue has grown by 698.50% in the past year. This is a very strong growth!
Measured over the past years, TAL shows a very strong growth in Revenue. The Revenue has been growing by 47.75% on average per year.
EPS 1Y (TTM)520%
EPS 3Y-7.58%
EPS 5Y-24.71%
EPS Q2Q%37930.36%
Revenue 1Y (TTM)698.5%
Revenue growth 3Y58.92%
Revenue growth 5Y47.75%
Sales Q2Q%62.37%
3.2 Future
The Earnings Per Share is expected to grow by 78.90% on average over the next years. This is a very strong growth
TAL is expected to show a strong growth in Revenue. In the coming years, the Revenue will grow by 27.03% yearly.
EPS Next Y159.62%
EPS Next 2Y100.04%
EPS Next 3Y78.9%
EPS Next 5YN/A
Revenue Next Year58.33%
Revenue Next 2Y45.8%
Revenue Next 3Y38.76%
Revenue Next 5Y27.03%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The estimated forward Revenue growth is still strong, although it is decreasing when compared to the stronger growth in the past years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 46.61, the valuation of TAL can be described as expensive.
TAL's Price/Earnings is on the same level as the industry average.
Compared to an average S&P500 Price/Earnings ratio of 29.63, TAL is valued quite expensively.
A Price/Forward Earnings ratio of 24.07 indicates a rather expensive valuation of TAL.
The rest of the industry has a similar Price/Forward Earnings ratio as TAL.
TAL's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 22.68.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 46.61 | ||
| Fwd PE | 24.07 |
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.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of TAL indicates a rather cheap valuation: TAL is cheaper than 87.50% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 14.54 | ||
| EV/EBITDA | 39.82 |
4.3 Compensation for Growth
The 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 78.90% in the coming years.
PEG (NY)0.29
PEG (5Y)N/A
EPS Next 2Y100.04%
EPS Next 3Y78.9%
5. Dividend
5.1 Amount
No dividends for TAL!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
14.45
+0.1 (+0.7%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryDiversified Consumer Services
Earnings (Last)
Earnings (Next)
Inst Owners64.46%
Inst Owner Change-1.71%
Ins Owners0%
Ins Owner Change0%
Market Cap8.73B
Analysts85
Price Target14.96 (3.53%)
Short Float %3.22%
Short Ratio6.03
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly Dividend1.18
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)43.2%
Min EPS beat(2)37.88%
Max EPS beat(2)48.51%
EPS beat(4)4
Avg EPS beat(4)230.4%
Min EPS beat(4)37.88%
Max EPS beat(4)605.15%
EPS beat(8)5
Avg EPS beat(8)-122.83%
EPS beat(12)7
Avg EPS beat(12)-117.03%
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)2
Avg Revenue beat(2)6.1%
Min Revenue beat(2)1.46%
Max Revenue beat(2)10.74%
Revenue beat(4)4
Avg Revenue beat(4)6.34%
Min Revenue beat(4)1.46%
Max Revenue beat(4)10.74%
Revenue beat(8)8
Avg Revenue beat(8)6.36%
Revenue beat(12)10
Avg Revenue beat(12)4.21%
Revenue beat(16)N/A
Avg Revenue beat(16)N/A
PT rev (1m)4.08%
PT rev (3m)6.95%
EPS NQ rev (1m)3.27%
EPS NQ rev (3m)2.49%
EPS NY rev (1m)37.04%
EPS NY rev (3m)31.71%
Revenue NQ rev (1m)7.16%
Revenue NQ rev (3m)11.32%
Revenue NY rev (1m)4.64%
Revenue NY rev (3m)4.35%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 46.61 | ||
| Fwd PE | 24.07 | ||
| P/S | 0.82 | ||
| P/FCF | 14.54 | ||
| P/OCF | 14.54 | ||
| P/B | 1.02 | ||
| P/tB | 1.02 | ||
| EV/EBITDA | 39.82 |
EPS(TTM)0.31
EY2.15%
EPS(NY)0.6
Fwd EY4.15%
FCF(TTM)0.99
FCFY6.88%
OCF(TTM)0.99
OCFY6.88%
SpS17.57
BVpS14.22
TBVpS14.21
PEG (NY)0.29
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 1.11% | ||
| ROE | 4.92% | ||
| ROCE | 3.41% | ||
| ROIC | 2.29% | ||
| ROICexc | 2.92% | ||
| ROICexgc | 2.92% | ||
| OM | 5.73% | ||
| PM (TTM) | 3.98% | ||
| GM | 22.47% | ||
| FCFM | 5.66% |
ROA(3y)-7.73%
ROA(5y)-5.22%
ROE(3y)-7.65%
ROE(5y)-5.91%
ROIC(3y)N/A
ROIC(5y)N/A
ROICexc(3y)N/A
ROICexc(5y)N/A
ROICexgc(3y)N/A
ROICexgc(5y)N/A
ROCE(3y)N/A
ROCE(5y)N/A
ROICexcg growth 3YN/A
ROICexcg growth 5Y-37.25%
ROICexc growth 3YN/A
ROICexc growth 5Y-28.7%
OM growth 3YN/A
OM growth 5Y-13.17%
PM growth 3YN/A
PM growth 5Y-22.37%
GM growth 3Y-29.57%
GM growth 5Y-19.01%
F-Score5
Asset Turnover0.28
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.03 | ||
| Debt/FCF | 43.91 | ||
| Debt/EBITDA | 11.93 | ||
| Cap/Depr | N/A | ||
| Cap/Sales | N/A | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 80.75% | ||
| Profit Quality | 142.13% | ||
| Current Ratio | 1.52 | ||
| Quick Ratio | 0.27 | ||
| Altman-Z | 1.11 |
F-Score5
WACC7%
ROIC/WACC0.33
Cap/Depr(3y)372.96%
Cap/Depr(5y)286.95%
Cap/Sales(3y)7.18%
Cap/Sales(5y)6.55%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)520%
EPS 3Y-7.58%
EPS 5Y-24.71%
EPS Q2Q%37930.36%
EPS Next Y159.62%
EPS Next 2Y100.04%
EPS Next 3Y78.9%
EPS Next 5YN/A
Revenue 1Y (TTM)698.5%
Revenue growth 3Y58.92%
Revenue growth 5Y47.75%
Sales Q2Q%62.37%
Revenue Next Year58.33%
Revenue Next 2Y45.8%
Revenue Next 3Y38.76%
Revenue Next 5Y27.03%
EBIT growth 1Y693.29%
EBIT growth 3YN/A
EBIT growth 5Y28.29%
EBIT Next Year567.57%
EBIT Next 3Y151.41%
EBIT Next 5Y88.66%
FCF growth 1Y852.19%
FCF growth 3Y2.97%
FCF growth 5YN/A
OCF growth 1Y22832.4%
OCF growth 3Y21.14%
OCF growth 5Y54.24%