TAL Education Group (NYSE:TAL) is a company with exceptional fundamental characteristics. Upon building up an investment case for a stock, we should look at various aspects. In the case of TAL, it is a financially-healthy company with an impressive track record and a buoyant future outlook. Below is a brief commentary on these key aspects. For those interested in digger a bit deeper into my commentary, read the full report on TAL Education Group here.
Exceptional growth potential with solid track record
One reason why investors are attracted to TAL is its notable earnings growth potential in the near future of 43%. The optimistic bottom-line growth is supported by an outstanding revenue growth of 95% over the same time period, which indicates that earnings is driven by top-line activity rather than purely unsustainable cost-reduction initiatives. TAL delivered a bottom-line expansion of 87% in the prior year, with its most recent earnings level surpassing its average level over the last five years. Not only did TAL outperformed its past performance, its growth also exceeded the Consumer Services industry expansion, which generated a 33% earnings growth. This is an optimistic signal for the future.
TAL is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This indicates that TAL has sufficient cash flows and proper cash management in place, which is a crucial insight into the health of the company. TAL seems to have put its debt to good use, generating operating cash levels of 2.8x total debt in the most recent year. This is also a good indication as to whether debt is properly covered by the company’s cash flows.
For TAL Education Group, I’ve put together three essential factors you should further examine:
- Valuation: What is TAL worth today? Is the stock undervalued, even when its growth outlook is factored into its intrinsic value? The intrinsic value infographic in our free research report helps visualize whether TAL is currently mispriced by the market.
- Dividend Income vs Capital Gains: Does TAL return gains to shareholders through reinvesting in itself and growing earnings, or redistribute a decent portion of earnings as dividends? Our historical dividend yield visualization quickly tells you what your can expect from TAL as an investment.
- Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of TAL? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.