TAL Education Group ADR

TAL: XNYS (USA)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	$1.70	Bjbp	Bdwbr

TAL Earnings: Content Solutions To Drive Growth in the Near Term

Cheng Wang

Jul 28, 2023

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.

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How we make money

We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.

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Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.

To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.

Read our editorial policy to learn more about our process.

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