Has TAL Education Group (NYSE:TAL) Improved Earnings Growth In Recent Times?
Assessing TAL Education Group’s (NYSE:TAL) performance as a company requires looking at more than just a years’ earnings data. Below, I will run you through a simple sense check to build perspective on how TAL Education Group is doing by comparing its most recent earnings with its historical trend, in addition to the performance of its consumer services industry peers. Check out our latest analysis for TAL Education Group
How Did TAL’s Recent Performance Stack Up Against Its Past?
I look at data from the most recent 12 months, which either annualizes the most recent 6-month earnings update, or in some cases, the most recent annual report is already the latest available financial data. This allows me to examine many different companies on a more comparable basis, using the latest information. For TAL Education Group, its most recent trailing-twelve-month earnings is US$163.18M, which compared to the prior year’s level, has climbed up by a substantial 74.60%. Since these figures are relatively short-term, I’ve estimated an annualized five-year figure for TAL’s net income, which stands at US$70.66M This suggests that, on average, TAL Education Group has been able to increasingly improve its bottom line over the last couple of years as well.
How has it been able to do this? Well, let’s take a look at whether it is solely a result of industry tailwinds, or if TAL Education Group has experienced some company-specific growth. The hike in earnings seems to be propelled by a robust top-line increase overtaking its growth rate of expenses. Though this has caused a margin contraction, it has made TAL Education Group more profitable. Looking at growth from a sector-level, the US consumer services industry has been growing, albeit, at a subdued single-digit rate of 7.44% over the past twelve months, and 6.69% over the last five years. This means that whatever uplift the industry is deriving benefit from, TAL Education Group is able to leverage this to its advantage.
What does this mean?
While past data is useful, it doesn’t tell the whole story. Positive growth and profitability are what investors like to see in a company’s track record, but how do we properly assess sustainability? I recommend you continue to research TAL Education Group to get a better picture of the stock by looking at:
1. Future Outlook: What are well-informed industry analysts predicting for TAL’s future growth? Take a look at our free research report of analyst consensus for TAL’s outlook.
2. Financial Health: Is TAL’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 30 November 2017. This may not be consistent with full year annual report figures.
To help readers see pass 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.
