Why TAL Education Stock Fell 12.6% Last Month

What happened

Shares of TAL Education Group (NYSE:TAL) slipped 12.6% in October, according to data from S&P Global Market Intelligence. The stock fell after the company reported second-quarter earnings late in the month and then moved lower amid a sell-off for the broader market. 

^SPX Chart

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TAL published third-quarter results on Oct. 22, delivering top- and bottom-line results that fell short of the market’s expectations. The company posted non-GAAP (adjusted) earnings per share on revenue of $1.1 billion, while the average analyst target had called for per-share earnings of $0.11 on sales of $1.12 billion. 

Students.

Image source: Getty Images.

So what

Despite missing Wall Street’s sales and earnings targets, TAL registered another quarter of strong sales and enrollment numbers. The Chinese company reported a 20.8% year-over-year sales increase in the second quarter,and its operating loss narrowed from $60.8 million in the prior-year period to $49.1 million in this year’s quarter. Total student enrollments for normal-price, long-term courses climbed 65% year over year to reach roughly 5.63 million. 

Now what

TAL Education stock has regained some ground amid momentum for the broader market in November. The company’s share price is up roughly 7% in the month so far.  

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^SPX data by YCharts

TAL is guiding for third-quarter revenue to between $1.061 billion and $1.094 billion, good for growth of roughly 30% at the midpoint of the target. 

TAL Education has a market capitalization of roughly $42.8 billion. The company is valued at roughly 9.8 times this year’s expected sales and 126.3 times expected earnings.

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