TAL Education Group ADR
Morningstar Rating for Stocks | Fair Value | Economic Moat | Capital Allocation |
---|---|---|---|
$6.20 | Trqv | Ckmv |
TAL Earnings: Content Solutions To Drive Growth in the Near Term
TAL Education's, or TAL's, fiscal 2024 first quarter (ending May 2023) revenue beat management guidance but adjusted net income missed Refinitiv consensus expectation. This was mainly due to the exponential growth of the low-margin content solutions business. As such, we increase our fiscal 2024 revenue forecast to USD 1.31 billion from 1.25 billion but widen our net loss estimate to USD 113 million from USD 71 million. We still expect TAL to break even in fiscal 2026. Our fair value estimate remains USD 5.50. Shares closed 17% above our fair value estimate on July 27, and we suggest investors wait for better entry points.