TAL Education Group American Depositary Shares (TAL)

FairStock Score: 70/100 — STEADY

Key Financials

Strengths

• Generates $405 million in annual free cash flow (6.3% yield on market cap)
• Conservative balance sheet with debt-to-equity of just 0.11, providing financial flexibility
• Revenue growth of 27.0% demonstrates strong top-line momentum
• FairStock composite score of 70/100 places it in the top tier across value, quality, and momentum factors

AI Analysis

TAL Education Group American Depositary Shares is a small-cap consumer defensive company valued at $6.5 billion. The business generates $2.8 billion in annual revenue with a 8.7% net margin and $405 million in free cash flow. From a quality standpoint, TAL shows Altman Z-Score of 2.2 in the grey zone and modest 8% ROE. On valuation, the stock is attractively valued at 11.9x earnings, with a modest 7% margin of safety vs Graham Number. Growth dynamics show revenue growing at 27.0% and profit growth of 466.1%. Our composite FairStock Score of 70/100 reflects above-average fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

TAL's 27% revenue growth trajectory could accelerate as it captures additional market share in the consumer defensive sector. With $405 million in annual free cash flow (6.3% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

Macro headwinds or sector-specific disruption could pressure margins, particularly if competitive intensity increases in the consumer defensive space. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer