TAL Education Group Beats Up on Analysts Yet Again

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TAL Education Group (NYS: XRS) reported earnings on Jan. 19. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Nov. 30 (Q3), TAL Education Group beat expectations on revenues and crushed expectations on earnings per share.

Compared to the prior-year quarter, revenue increased significantly and earnings per share dropped significantly.

Gross margins grew, operating margins shrank, and net margins dropped.

Revenue details
TAL Education Group chalked up revenue of $40.7 million. The three analysts polled by S&P Capital IQ foresaw revenue of $37.0 million. Sales were 69% higher than the prior-year quarter's $24.1 million.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.

EPS details
Non-GAAP EPS came in at $0.04. The two earnings estimates compiled by S&P Capital IQ predicted $0.02 per share on the same basis. GAAP EPS of $0.02 for Q3 were 46% lower than the prior-year quarter's $0.04 per share.

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Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 41.8%, 20 basis points better than the prior-year quarter. Operating margin was 2.9%, 720 basis points worse than the prior-year quarter. Net margin was 3.5%, 630 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $49.4 million. On the bottom line, the average EPS estimate is $0.07.

Next year's average estimate for revenue is $176 million. The average EPS estimate is $0.31.

Investor sentiment
The stock has a one-star rating (out of five) at Motley Fool CAPS, with nine members out of 13 rating the stock outperform, and four members rating it underperform. Among six CAPS All-Star picks (recommendations by the highest-ranked CAPS members), two give TAL Education Group a green thumbs-up, and four give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on TAL Education Group is buy, with an average price target of $15.17.

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At the time this article was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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