TALTAL Education Group
Is the business good?
The checks split: earnings fully cash-backed (2.8×), but margins compressing.
Operating profit is fully backed by cash.
Operating margin has narrowed over the past few years, profitability per dollar of sales is eroding.
Margin-driven, fat margins on slower asset turns. ROE 14% = margin × turnover × leverage.
Unless marked, from derived.
Where this answer is blind. The F-score rewards improvement, so an already-elite company can score mid-pack.
How good a business is TAL?
TAL Education Group earns 41% on the capital it employs against a 9.0% cost of capital, so the business is worth more the bigger it gets.
Return on invested capital · cost of capital 9.0% · 32 points above what the capital costs: growth creates value
- Operating margin
- 9.2%
Operating margin · Education & Training Services median 13% · fiscal year to FY2026
- Cash conversion
- 2.81×
Cash conversion · operating cash flow covers the operating profit after tax
- Share count, year on year
- −6.0%
Share count, year on year · bought back, each share owns more of the company
| Year | Operating margin |
|---|---|
| FY2021 | −9.8% |
| FY2022 | −14% |
| FY2023 | −8.9% |
| FY2024 | −4.6% |
| FY2025 | −0.14% |
| FY2026 | 9.2% |
Details›
- Gross marginfiscal year to FY2026
- 55%
- Operating marginfiscal year to FY2026
- 9.2%
- Net marginfiscal year to FY2026
- 18%
- Free cash flow margin
- 17%
- Revenue, trailing twelve months
- $3.01B
- Free cash flow, trailing twelve months
- $508M
- Net income, trailing twelve months
- $531M
- Return on invested capitaloperating profit after tax ÷ debt + equity − cash
- 41%
Margins, capital and share counts from the statements as filed with the SEC; cash conversion is operating cash flow over operating profit after tax.
Education & Training Services
Ranks #10 of 15 by RyuScore