CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:
TAL Education Group (TAL) reported FY 26 (Feb.) EPADS of USD2.75 (FY 25: USD0.41), above our expectation. Earnings were partly boosted by higher net other income (USD347M vs. USD52M in FY 25), which included investment fair value gains. Revenue grew 34% (vs. +51% in FY 25), supported by enrichment learning programs and learning devices, with ongoing investments in technology integration and AI capabilities. Operating profit was USD276M (9.2% margin) vs. a loss of USD7.4M at -0.3% margin in FY 25, due to higher scale efficiency amid topline expansion, with gross margin +2%-pts to 55% and lower SG&A expenses as a share of revenue. TAL's balance sheet position remained robust with net cash of USD2.9B as of end-FY 26, despite lower than USD3.3B in FY 25. We expect revenue growth to ease in FY 27-FY 28. We see a potential moderation in learning center network expansion, growth in online enrichment learning programs, and sales of learning devices, following the solid growth in the post-2021 restructuring years.