TAL Education Group Beats Up on Analysts Yet Again

Seth Jayson, The Motley Fool
Updated

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 thisarticle 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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