Stock (Symbol) |
TAL Education (XRS) |
Stock Price |
$37 |
Sector |
| Food & Necessities |
Data is as of |
| October 26, 2015 |
Expected to Report |
| Jan 20 – Jan 25 |
Company Description |
 TAL Education Group is a holding company for a group of companies engaged in provision of after-school tutoring programs for primary and secondary school students in the People’s Republic of China (the PRC). The Company is a K-12 after-school tutoring services provider in the PRC. The Company offers tutoring services to K-12 students covering core academic subjects, including mathematics, English, Chinese, physics, chemistry and biology , history, political science and geography as well as preschool classes. It delivers its tutoring services through small classes, personalized premium services (such as one-on-one tutoring) and online course offerings. As of February 28, 2013, it network consisted of 255 learning centers and 237 service centers in 15 cities throughout China, with most of these learning centers and service centers located in Beijing and Shanghai, as well as its online platform. Source: Thomson Financial |
Sharek’s Take |
 TAL Education (XRS) provides after-school tutoring for in China for children between kindergarten and the 12th grade through a combination of small classes, 1-on-1 tutoring, and online courses. Last qtr TAL, which stands for Tomorrow Advancing Life, added 14 new learning centers for a total of 303, including 215 small class learning centers and 88 one-on-one centers with around 40% total centers in Beijing. Kids in China have a college admission rate for a 4-year degree college of just 41% compared to 64% here in the states. And just 9% of students gain admission into top universities compared to 28% in the US. So Education, and top grades, are of importance in China. Recently, TAL stock has shot from $30 to $40 as revenue and enrolments each grew more than 40% last qtr. But profits fell 28% as the company faced challenges in its biggest market, Beijing, where it closed 5 centers and opened 2 new ones. I have TAL on my radar and would like to own the stock, but feel the recent surge sent the stock up too fast and we should wait for a pullback to get in. |
One Year Chart |
 There’s very odd profit growth going on with this company right now. With revenue growth of +40% profits should be growing as well. They didn’t. Sales growth has been strong for the past year yet profits have grown in just one qtr. Last qtr was negatively affected by school closure in Beijing during a parade vacation and there were also negative currency factors. Nice Estimated Long-Term Growth Rate of 28%. |
Fair Value |
 These charts were done on 10/26 when the stock was $37, today its $41, so the P/E is around 30 now which I feel is fair for the stock. The company has a February fiscal year-end so I am not looking ahead to 2016 estimates until next qtr. |
Bottom Line |
 I like the profit growth XRS has been able to deliver each year. The stock had a nice run from mid-2013 to mid-2014 but hasn’t done much since. I like this stock and really wish I had purchased it during the Chinese stock rout a couple months back. But the reality is the EPS numbers the company is putting out aren’t that great. I’ll continue to keep TAL Education on the radar and look to buy if it comes back down to below $35.
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Power Rankings |
Growth Stock Portfolio
N/AAggressive Growth Portfolio N/AConservative Stock Portfolio N/A |
