|Bid||59.31 x 800|
|Ask||59.32 x 1300|
|Day's Range||57.85 - 59.52|
|52 Week Range||30.78 - 59.76|
|Beta (5Y Monthly)||0.37|
|PE Ratio (TTM)||347.78|
|Earnings Date||Apr 22, 2020 - Apr 26, 2020|
|Forward Dividend & Yield||N/A (N/A)|
|Ex-Dividend Date||May 08, 2017|
|1y Target Est||57.22|
(Bloomberg Opinion) -- Investors looking for an angle on the coronavirus crisis have naturally landed upon the online education sector in the hopes that tens of millions of quarantined school kids will turn such providers into profit-making machines on par with China’s hottest internet companies.Almost every mainland province and city has pushed back the starting date of the spring term by weeks. Most students haven’t seen the inside of a classroom since Lunar New Year in late January. Not wanting to be left behind, students, their schools and parents have turned to online alternatives, including options not offered by traditional education businesses.Giant Alibaba Group Holding Ltd., for example, added 100,000 servers to support its free DingTalk messenger, which is being used across the country to help pupils communicate with teachers and watch online classes. A similar tale is told at WeChat provider Tencent Holdings Ltd.Even San Fransciso-based Seesaw Learning Inc., developer of an early-childhood learning and communication app with less than 10% of revenue from China, saw a 31% jump in traffic from there and 21% from Hong Kong. Co-founder Adrian Graham admits it’s hard to tell whether that spike is due to normal post-new year usage increases or the impact of quarantined kids at the mostly international schools in the Greater China region that use the product.As a result, this could be the biggest sustained, mass experiment in online education since the internet was founded in the 1980s. But for those who specialize in education as a business, there’s little to suggest a surge of online students will boost the bottom line.In China, the commercial education business is driven chiefly by demand for after-school tuition (AST) classes. In physical classrooms, also known as cram schools, which are owned and operated by these providers, children as young as kindergartners spend an extra few hours after their normal day (and on weekends and during school holidays) to bone up on core subjects of Chinese, English and mathematics.To deal with the quarantines, TAL Education Group, one of China’s largest education companies, is moving students from offline classes to its programs and refunding the difference in tuition fees, with online up to 50% cheaper, Daiwa Capital Markets HK Ltd. analysts John Choi and Candis Chan wrote this month. New Oriental Education & Technology Group Inc., the other big player in Chinese education and a leader in test-preparation courses, is also moving students to its web and app platforms, they wrote. A key narrative supporting the thesis for big online education profits is that the massive home-schooled education program now under way will work as great marketing for companies like TAL and New Oriental, which spend a lot of money just getting students to enroll in their classes. A captive market of kids forced to learn via the internet might then be converted to long-term online tuition customers. That’s the theory, anyway.In truth, they’d better hope that doesn’t happen. Online is not as profitable as physical classrooms, competition is tougher, and average prices are falling faster. Take TAL as an example. Revenue for the three months to Nov. 30 climbed 47% from the previous year. Online sales were the major driver, climbing 86%. But actual enrollments grew 107%. In other words, student numbers rose faster than revenue because average prices actually fell 9% for the period.So while online has expanded, it still accounts for only 18% of total revenue. The glass-half-full scenario would tell you that there’s great potential ahead. A more pessimistic analysis would suggest that if TAL needs to cut prices this early, then there’s not a lot of room to boost profitability as time marches on. And the company is already suffering pressure that is hurting the bottom line. Operating margin shrank to 9% from 12% in the previous year, with net income plunging 77%.New Oriental isn’t faring much better. Online education accounted for 6% of its revenue in the latest fiscal year. The company gets more than 80% of sales from language training and test preparation. That indicates that internet-based programs have great potential. Yet data show New Oriental is struggling to scale. Subsidiary Koolearn Technology Holding Ltd., which it spun off and listed in Hong Kong, posted revenue growth of just 19% in the six months to Nov. 30. What’s more, operating loss tripled with margin deteriorating from -4.6% to -16.5%.One company might have nailed it, however. GSX Techedu Inc. describes itself as “a leading online K-12 large-class after-school tutoring service provider.” GSX’s niche is massive live online classes — it boasts being able to host 100,000 students in a single broadcast — that allow it to rake in cash while saving on teacher salaries, which account for a major proportion of the costs borne by rivals.That scalability helped it turn profitable in 2018, a feat repeated last year, earning it an operating margin of 10.7%, in line with TAL and New Oriental.GSX has since been joined in offering massive classes. More than 2.4 million users are reported to have tuned in for some TAL elementary-school classes during the coronavirus period. Others are jumping aboard, too. Alibaba, for example, developed DingTalk for enterprise use. While it launched a campus-focused program for the product last year, it wasn’t until the current crisis that its popularity in education really took off. Worse for GSX, Alibaba is offering it for free and allowing schools to make use of existing teachers and materials.So while the outbreak is necessitating internet-based education options, it’s also highlighting how cheap online learning can be. The great thing about the internet is its ability to allow anyone to deliver content easily and cheaply. That may not be the outcome education companies really would be hoping for.To contact the author of this story: Tim Culpan at firstname.lastname@example.orgTo contact the editor responsible for this story: Patrick McDowell at email@example.comThis column does not necessarily reflect the opinion of Bloomberg LP and its owners.Tim Culpan is a Bloomberg Opinion columnist covering technology. He previously covered technology for Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
If the past is any guide, stocks should rebound once the deadly new coronavirus appears to be contained—Chinese stocks especially.
New Oriental Education earnings growth accelerated to 157%. TAL Education earnings were in line, but sales guidance was light. New Oriental and TAL Education shares fell.
TAL Education Group (NYSE: TAL) ("TAL" or the "Company"), a leading K-12 after-school tutoring services provider in China, today announced its unaudited financial results for the third quarter of fiscal year 2020 ended November 30, 2019.
TAL Education Group (NYSE: TAL) ("TAL" or the "Company"), a leading K-12 after-school tutoring services provider in China, today announced the appointment of Mr. Yunfeng Bai to TAL's board of directors and the resignation of Mr. Yachao Liu from his post as a director of the Company, both effective January 21, 2020.
IBD 50 stock New Oriental Education broke into a buy zone Tuesday. EDU stock is leading the market. So are Chinese school peers TAL Education and GSX Techedu.
Trade war, induced by the imposition of tariffs on imports by the United States, has hurt growth prospects of China. Despite that, some stocks performed well and have healthy prospects ahead.
TAL Education Group ("TAL" or the "Company") (NYSE: TAL), a leading K-12 after-school tutoring services provider in China, today announced that it will release its unaudited financial results for the third quarter of fiscal year 2020 ended November 30, 2019, before the market opens on Tuesday, January 21, 2020.
Hedge funds are known to underperform the bull markets but that's not because they are terrible at stock picking. Hedge funds underperform because their net exposure in only 40-70% and they charge exorbitant fees. No one knows what the future holds and how market participants will react to the bountiful news that floods in each […]
China is in the beginning of a digital and urban transformation that could remake the country through a significant increase in productivity.
Does Synopsys, Inc. (NASDAQ:SNPS) represent a good buying opportunity at the moment? Let’s quickly check the hedge fund interest towards the company. Hedge fund firms constantly search out bright intellectuals and highly-experienced employees and throw away millions of dollars on satellite photos and other research activities, so it is no wonder why they tend to […]
With the S&P 500 at record highs, investors are facing an unusual problem: too many places to put their money. A strong jobs report and good news on the US-China trade front have helped to boost the markets; as noted by investment bank Goldman Sachs, in the last week of October over $6.1 billion went back into global stock funds.But where is the smart money going? Goldman economist Silvia Ardagna favors US stocks, but he is careful to hedge his recommendation: “The de-escalation of trade tensions between the U.S. and China has triggered the question whether investors have been too negative and there could be some positive surprises.” He adds that the ongoing US-China trade talks, and the good feelings they have engendered, have his wealthy clients eager to get their money working again. And with that background, we can better understand some of the surprising recommendations that have come from Goldman’s financial research team in recent days. Oneok (OKE)Based in Tulsa, Oklahoma, Oneok is a $12 billion dollar-a-year midstream pipeline company for the natural gas industry in the American West. The company provides midstream services – gathering, processing, storing, transporting, and marketing – for natural gas producers in the Mid-Continent, Permian, and Rocky Mountain production regions. Oneok netted $305.5 million in income in 2018.In its last quarterly report, released on October 30, OKE showed EPS in-line with the estimates, at 74 cents. Revenues, however, missed the forecast by 4.2%, coming in at $2.26 billion against the expected $2.36 billion. The revenue miss was impacted by a combination of expenses due to expanded operations and higher operating costs. While cash flow was down roughly 12% year-over-year, cash on hand was up. Oneok had an impressive $673.3 million in cash and cash equivalents available at the end of September, compared to just $12 million nine months earlier.Goldman analyst Michael Lapides notes the company’s mixed results, but also points out that ‘expanded operations’ specifically means two major pipeline projects expected to come on-line next year. Lapides writes, “OKE is in the late stages of a signiﬁcant capex cycle, with two large-scale pipeline projects expected to ramp up over the next 6-9 months per management, driving stronger returns, and deleveraging... Given OKE’s asset integration and our wet gas production estimates, we believe there is good visibility to volume growth for these two pipeline projects…”In line with his outlook, Lapides upgrades OKE to a Buy rating, and sets an $81 price target, suggesting an upside of 16% to the stock. (To watch Lapides' track record, click here)OKE is not widely covered by the Street’s analyst corps; among those who do cover the stock, however, the consensus is a Moderate Buy. OKE shows an average price target of $79.33, implying room for about 13% upside from the current trading value of $69.77. (See Oneok's stock analysis on TipRanks)Vir Biotechnology (VIR)This biotech research company, founded in 2016 as a clinical-stage immunology company focusing on the eradication of infectious diseases, had its IPO last month. Since then, it is up 12% in the markets; in its first few weeks of trading, volumes have been modest, and the stock has been volatile.Vir is backed by the Gates Foundation, and has two main projects past the pre-clinical testing phase. A hepatitis B treatment, in collaboration with Alnylam, is in Phase 2 testing, while an Influenza A treatment is in Phase 1 testing. Three more drugs, for TB, HIV, and another for Hep-B, are in the pre-clinical phase. The Gates Foundation is supporting the TB and HIV research. For a small biotech, Vir has a varied pipeline with strong potential.As a new company, Vir hasn’t got a long public record to lean on. That hasn’t stopped Goldman Sachs analyst Paul Choi from initiating coverage of the stock with a Buy rating and an aggressive price target of $37, which implies an impressive upside potential of 133%. (To see Choi's track record, click here)In his initiation report, Choi says, “While we acknowledge that much of the pipeline is early stage, we see signiﬁcant upside to the stock driven primarily by upcoming Phase 2 HBV and inﬂuenza data in 2020, which we think could increase investor conﬁdence in VIR’s platform approach to infectious diseases…” Choi acknowledges that this company is in its early stages, and that the clinical research, while promising, has only just begun. He adds, “…we acknowledge that VIR is several years away from the commercial launch of any of its clinical candidates. We therefore anticipate focus will remain on clinical data over the near-term…”How does Choi's bullish bet weigh in against the Street? It appears the analyst is not the only one enthusiastic on this biotech company's prospects, with TipRanks analytics demonstrating VIR as a Strong Buy. Out of 4 analysts polled by TipRanks in the last 3 months, all 4 are bullish. With a return potential of nearly 100%, the stock’s consensus target price stands at $29. (See Vir's stock analysis on TipRanks)Tal Education Group (TAL)And now we get to a Chinese company. TAL, based in Beijing, describes itself as “a leading education and technology enterprise.” The company’s core focus is on improving science and technology education through integration of internet-based tech in the classroom. TAL has had success in China’s tier-1 cities, and is in process of shifting its priorities to the so-called tier-2 cities.TAL trades on the NYSE, where it has shown a 61% year-to-date gain, nearly triple the S&P gain of 22%. In the company’s most recent quarterly release, for Q2 fiscal 2020, it showed a drop in EPS to 2 cents per share, despite a 33% year-over-year gain in revenues to $936 million. The jump in revenue was attributed to a 54% increase in enrolled students from the year-ago quarter. TAL also boosted Q3 guidance by 41%, to $826 million. Shares spiked after the earnings release, gaining 13%.In a recent report, Goldman’s Christine Cho revisited her firm’s earlier review of TAL and upgraded the rating from Neutral to Buy. Cho wrote, “TAL’s learning center (LC) expansion beyond the top 5 cities has become a key focus in its capacity expansion in recent years. In fact, TAL entered 14/13 new cities in FY19/FY1H20, reaching a footprint of 69 cities as of FY1H20, and learning centers in non-top 5 cities have grown to 52% of the total LC base… We strongly view effective penetration into lower-tier cities as key to long term growth…” Cho’s $50 price target on TAL suggests room for a 15% upside. (To watch Cho's track record, click here)The online education company now looks like a very compelling investing opportunity, as TipRanks analytics showcasing TAL as a Strong Buy. (See Tal Education's stock analysis on TipRanks)
TAL Education earnings missed Thursday, but TAL stock soared. On Tuesday, New Oriental Education earnings beat, but the China stock reversed sharply lower.
- Net Revenues up by 33.8% Year-Over-Year - Non-GAAP Income from Operations down by 0.2% Year-Over-Year - Net loss Attributable to TAL was US$14.4 million , compared to net income attributable to TAL of ...
GSX Techedu is the IBD Stock Of The Day as the recent IPO stock forms a new base while also potentially offering a separate entry for aggressive investors.
World-class money managers like Ken Griffin and Barry Rosenstein only invest their wealthy clients' money after undertaking a rigorous examination of any potential stock. They are particularly successful in this regard when it comes to small-cap stocks, which their peerless research gives them a big information advantage on when it comes to judging their worth. […]
BEIJING , Sept. 26, 2019 /PRNewswire/ -- TAL Education Group ("TAL" or the "Company") (NYSE: TAL), a leading K-12 after-school tutoring services provider in China , today announced that ...