TAL Education Group (TAL) Shares: Are They Risky Or Cheap?

TAL Education Group (NYSE:TAL) finished Wednesday with an addition of $0.27 to close at $4.97, an upside of 5.74 percent. An average of 14,292,380 shares of common stock have been traded in the last five days. There was a gain of $0.37 in the past week. The last 20 days have seen an average of 12,829,250 shares traded, while the 50-day average volume stands at 19,167,980.

TAL stock has increased by 6.42% in the last month. The company shares reached their 1-month lowest point of $4.17 on 09/20/21. With the stock rallying to its 52-week high on 02/16/21, shares of the company touched a low of $4.03 and a high of $90.96 in 52 weeks. In spite of this, the price is down -94.54% from the 52-week high.


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Valuation Metrics

TAL Education Group (TAL) has a trailing price-to-earnings (P/E) ratio of 24.50 for the broader industry and 24.47 for the sector. In the last five years, TAL Education Group’s PE ratio has ranged between 2409.84 and 44.17. The stock’s beta is 0.11. Other valuation ratios to consider include the trailing price-to-sales (P/S) ratio at 0.71, the price-to-book (PB) ratio at 0.61, and the price-to-cash flow ratio at 3.35.

The company’s most recent quarterly dividend payment was $0.0833 a share, representing a down of -8.04 from $0.09 last year.

The quick ratio of TAL Education Group for the three months ended February 27 was 2.40, and the current ratio was 2.40, indicating that the company is able to meet its debt obligations. Further, the company has a long term debt to equity ratio of 0.44 and a total debt to equity ratio of 0.49 for the quarter ending February 27. On the profitability front, the trailing 12-month gross margin is 54.40% against a 5-year average of 52.5%. TAL Education Group’s EBITDA margin for the year ending February 27 is -4.21%, while its operating margin for the same period stands at -10.30%. Its gross profit as reported stood at $2.45 billion compared to revenue of $4.5 billion.

For investors, determining the potential profitability of the investment also depends on the performance of the company’s management. In the past 12 months, TAL Education Group’s return on assets was -1.30%, compared to 4.7% over the last five years. In the past year, the return on investment has been -5.10%, and the 5-year average is 6.3%. Meanwhile, the return on equity (ROE) for the past 12 months has been -3.10% and the 5-year average holds at 9.9%. For the broader industry, ROE averaged 11.73 over the past year.

Earnings Surprise

For the three-month period that ended February 27, TAL Education Group had $2.69 billion in cash. The analyst consensus anticipated TAL Education Group’s latest quarter earnings to come in at -$0.15 per share, but it turned out to be -$0.14, a 6.70% surprise. For the quarter, EBITDA amounted to -$297.21 million.

Technical Picture

From a technical analysis perspective, let’s take a brief look at TAL Education Group (TAL) price momentum. RSI 9-day as of the close on 13 October was 57.46%, suggesting the stock is Neutral, with historical volatility in this time frame at 78.29%.

As of today, TAL’s price is $4.81 +8.04% or $0.37 from its 5-day moving average. TAL is currently trading +13.21% higher than its 20-day SMA and -88.42% lower than its 100-day SMA. However, the stock’s current price level is -17.03% below the SMA50 and -92.69% below the SMA200.

The stochastic %K and %D were 59.28% and 62.25%, respectively, and the average true range (ATR) was 0.40. With the 14-day stochastic at 66.67% and the average true range at 0.46, the RSI (14) stands at 48.81%. The stock has reached 0.16 on the 9-day MACD Oscillator while the 14-day reading was at 0.20.

Analyst Ratings

Morgan Stanley upgraded TAL Education Group (NYSE: TAL) to a an Equal-weight rating in its most recent analyst report. Previously, the stock was rated as a an Underweight.The consensus rating for TAL Education Group (TAL) among analysts is Hold. According to current brokerage recommendations, 3 brokerage firms advise that investors sell TAL, while 5 suggest investors hold. There are 2 analysts who rate the stock as underweight. The stock is rated overweight by 2 analysts, while 4 others rate it as a “buy”.

What is TAL’s price target for the next 12 months?

Analysts predict a range of price targets between $3.60 and $89.00, with a median target of $6.85. Taking a look at these predictions, the average price target given by analysts for TAL Education Group (TAL) stock is $16.31.

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