TAL EDUCATION GROUP- ADR (TAL) Stock Fundamental Analysis
NYSE:TAL - New York Stock Exchange, Inc. - US8740801043 - ADR - Currency: USD
We assign a fundamental rating of 6 out of 10 to TAL. TAL was compared to 72 industry peers in the Diversified Consumer Services industry. While TAL has a great health rating, its profitability is only average at the moment. TAL is growing strongly while it is still valued neutral. This is a good combination!
1. Profitability
1.1 Basic Checks
In the past year TAL was profitable.
In the past year TAL had a positive cash flow from operations.
TAL had negative earnings in each of the past 5 years.
Of the past 5 years TAL 4 years had a positive operating cash flow.
1.2 Ratios
TAL's Return On Assets of 2.06% is fine compared to the rest of the industry. TAL outperforms 63.89% of its industry peers.
TAL's Return On Equity of 3.17% is in line compared to the rest of the industry. TAL outperforms 59.72% of its industry peers.
TAL has a Return On Invested Capital (0.03%) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.06% | ||
| ROE | 3.17% | ||
| ROIC | 0.03% |
ROA(3y)-8.43%
ROA(5y)-5.65%
ROE(3y)-10.61%
ROE(5y)-7.69%
ROIC(3y)N/A
ROIC(5y)N/A
1.3 Margins
Looking at the Profit Margin, with a value of 5.77%, TAL is in the better half of the industry, outperforming 66.67% of the companies in the same industry.
The Operating Margin of TAL (0.09%) is comparable to the rest of the industry.
Looking at the Gross Margin, with a value of 53.63%, TAL is in the better half of the industry, outperforming 70.83% of the companies in the same industry.
TAL's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 0.09% | ||
| PM (TTM) | 5.77% | ||
| GM | 53.63% |
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-0.21%
GM growth 5Y-0.18%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), TAL is destroying value.
TAL has less shares outstanding than it did 1 year ago.
TAL has more shares outstanding than it did 5 years ago.
TAL has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
2.2 Solvency
An Altman-Z score of 2.79 indicates that TAL is not a great score, but indicates only limited risk for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 2.79, TAL is in the better half of the industry, outperforming 73.61% of the companies in the same industry.
The Debt to FCF ratio of TAL is 0.09, which is an excellent value as it means it would take TAL, only 0.09 years of fcf income to pay off all of its debts.
TAL's Debt to FCF ratio of 0.09 is amongst the best of the industry. TAL outperforms 87.50% of its industry peers.
A Debt/Equity ratio of 0.01 indicates that TAL is not too dependend on debt financing.
With a decent Debt to Equity ratio value of 0.01, TAL is doing good in the industry, outperforming 70.83% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.01 | ||
| Debt/FCF | 0.09 | ||
| Altman-Z | 2.79 |
ROIC/WACC0
WACC7.54%
2.3 Liquidity
TAL has a Current Ratio of 2.57. This indicates that TAL is financially healthy and has no problem in meeting its short term obligations.
The Current ratio of TAL (2.57) is better than 81.94% of its industry peers.
TAL has a Quick Ratio of 2.51. This indicates that TAL is financially healthy and has no problem in meeting its short term obligations.
TAL's Quick ratio of 2.51 is amongst the best of the industry. TAL outperforms 80.56% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 2.57 | ||
| Quick Ratio | 2.51 |
3. Growth
3.1 Past
TAL shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 520.00%, which is quite impressive.
The earnings per share for TAL have been decreasing by -24.71% on average. This is quite bad
Looking at the last year, TAL shows a very strong growth in Revenue. The Revenue has grown by 55.63%.
Measured over the past years, TAL shows a very negative growth in Revenue. The Revenue has been decreasing by -10.28% on average per year.
EPS 1Y (TTM)520%
EPS 3Y-7.58%
EPS 5Y-24.71%
EPS Q2Q%194.07%
Revenue 1Y (TTM)55.63%
Revenue growth 3Y-30.79%
Revenue growth 5Y-10.28%
Sales Q2Q%62.37%
3.2 Future
The Earnings Per Share is expected to grow by 78.63% 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 2Y99.8%
EPS Next 3Y78.63%
EPS Next 5YN/A
Revenue Next Year58.61%
Revenue Next 2Y45.7%
Revenue Next 3Y38.67%
Revenue Next 5Y27.03%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
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
The Price/Earnings ratio is 28.81, which means the current valuation is very expensive for TAL.
Compared to the rest of the industry, the Price/Earnings ratio of TAL is on the same level as its industry peers.
TAL's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 28.92.
Based on the Price/Forward Earnings ratio of 14.91, the valuation of TAL can be described as correct.
Based on the Price/Forward Earnings ratio, TAL is valued a bit cheaper than 66.67% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 21.65. TAL is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.81 | ||
| Fwd PE | 14.91 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as TAL.
TAL's Price/Free Cash Flow ratio is rather cheap when compared to the industry. TAL is cheaper than 87.50% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 8.99 | ||
| EV/EBITDA | 695.11 |
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 78.63% in the coming years.
PEG (NY)0.18
PEG (5Y)N/A
EPS Next 2Y99.8%
EPS Next 3Y78.63%
5. Dividend
5.1 Amount
TAL does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
8.93
-2.05 (-18.67%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Services
GICS IndustryDiversified Consumer Services
Earnings (Last)
Earnings (Next)
Inst Owners64.46%
Inst Owner Change-0.07%
Ins Owners0%
Ins Owner Change0%
Market Cap5.40B
Analysts85.45
Price Target14.8 (65.73%)
Short Float %3.09%
Short Ratio5.4
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Yearly Dividend0.61
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)0%
PT rev (3m)4.08%
EPS NQ rev (1m)-2.11%
EPS NQ rev (3m)1.09%
EPS NY rev (1m)0%
EPS NY rev (3m)37.04%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)7.16%
Revenue NY rev (1m)0%
Revenue NY rev (3m)4.86%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.81 | ||
| Fwd PE | 14.91 | ||
| P/S | 2.61 | ||
| P/FCF | 8.99 | ||
| P/OCF | 8.99 | ||
| P/B | 1.43 | ||
| P/tB | 1.43 | ||
| EV/EBITDA | 695.11 |
EPS(TTM)0.31
EY3.47%
EPS(NY)0.6
Fwd EY6.71%
FCF(TTM)0.99
FCFY11.13%
OCF(TTM)0.99
OCFY11.13%
SpS3.42
BVpS6.24
TBVpS6.24
PEG (NY)0.18
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.06% | ||
| ROE | 3.17% | ||
| ROCE | 0.04% | ||
| ROIC | 0.03% | ||
| ROICexc | 0.52% | ||
| ROICexgc | 0.52% | ||
| OM | 0.09% | ||
| PM (TTM) | 5.77% | ||
| GM | 53.63% | ||
| FCFM | 29.02% |
ROA(3y)-8.43%
ROA(5y)-5.65%
ROE(3y)-10.61%
ROE(5y)-7.69%
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 5YN/A
ROICexc growth 3YN/A
ROICexc growth 5YN/A
OM growth 3YN/A
OM growth 5YN/A
PM growth 3YN/A
PM growth 5YN/A
GM growth 3Y-0.21%
GM growth 5Y-0.18%
F-Score6
Asset Turnover0.36
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.01 | ||
| Debt/FCF | 0.09 | ||
| Debt/EBITDA | 2.05 | ||
| Cap/Depr | N/A | ||
| Cap/Sales | N/A | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 2231.71% | ||
| Profit Quality | 502.9% | ||
| Current Ratio | 2.57 | ||
| Quick Ratio | 2.51 | ||
| Altman-Z | 2.79 |
F-Score6
WACC7.54%
ROIC/WACC0
Cap/Depr(3y)306.08%
Cap/Depr(5y)246.83%
Cap/Sales(3y)8.19%
Cap/Sales(5y)7.16%
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%194.07%
EPS Next Y159.62%
EPS Next 2Y99.8%
EPS Next 3Y78.63%
EPS Next 5YN/A
Revenue 1Y (TTM)55.63%
Revenue growth 3Y-30.79%
Revenue growth 5Y-10.28%
Sales Q2Q%62.37%
Revenue Next Year58.61%
Revenue Next 2Y45.7%
Revenue Next 3Y38.67%
Revenue Next 5Y27.03%
EBIT growth 1Y101.75%
EBIT growth 3YN/A
EBIT growth 5YN/A
EBIT Next Year567.54%
EBIT Next 3Y151.41%
EBIT Next 5Y88.66%
FCF growth 1Y279.67%
FCF growth 3Y-36.11%
FCF growth 5YN/A
OCF growth 1Y4037.46%
OCF growth 3Y-31.55%
OCF growth 5Y9.51%