Research Alert: CFRA Keeps Hold Opinion On Adss Of Tal Education Group
CFRA, an independent research provider, has providedwith the following research alert. Analysts at CFRA have summarized their opinion as follows:We lower our target price to USD12 (from USD14), 20x our FY 27 (Feb.) EPADS estimate, vs. the three-year mean of 31x, reflecting our projected easing of earning growth as the solid recovery in the post-FY 22 restructuring years normalizes. We forecast revenue growth of 31%/11% in FY 27/FY 28, supported by learning center expansion, higher enrollment in enrichment programs, and continued adoption of learning devices. While moderating from FY25-FY26 levels, this reflects a higher base and more disciplined expansion. Learning services should remain the largest contributor, with devices continuing to scale. We expect net margin to improve to 8.9%/9.8% in FY 27/FY 28 (FY26: 7.6% excluding one-offs), supported by economies of scale (including improving adoption under the learning devices business) and better operational efficiency. However, ongoing investments in AI and marketing are likely to partly offset gains. We maintain EPADS forecasts of USD0.61 for FY27 and introduce USD0.69 for FY28.