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Bull of the Day: TAL Education (XRS)

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When I first found this company, I’ll admit I was a little more excited than I should have been. At the time, it was the perfect mix of what I was looking for. Steady revenue with exposure to China. That’s not a combo you see every day. China was a wild card for such a long period of time but I still wanted to put some money there. Finding a steady revenue stream was key to my decision.

Then I found today’s Bull of the Day, TAL Education Group (XRS). TAL Education Group provides K-12 after-school tutoring service in China. It offers tutoring services to K-12 students covering academic subjects, including mathematics, English, Chinese, physics, chemistry and biology. The Company delivers its tutoring services through small classes, personalized premium services i.e. one-on-one tutoring and online course offerings. Its extensive network consists of learning centers and service centers in Beijing, Shanghai, Shenzhen, Guangzhou, Tianjin and Wuhan, as well as the Company's online platform.

The stock is a Zacks Rank #1 (Strong Buy) right now. The reason why is an analyst has recently increased their earnings estimates for the current year and next year. The bullish attitude has pushed up the Zacks Consensus Estimate from $1.02 to $1.04 for the current year and from $1.56 to $1.70 for next year.


If you take a look at the Price, Consensus and EPS Surprise chart on Zacks you can see why shares have rallied so much. Dating back to 2012 the company had several earnings estimate revisions. You can see the evolution of our Zacks Consensus Estimates by looking at the mulit-colored lines here on our chart. Each year has a different color that clearly shows the change in consensus over the years. The gaps between the lines represent EPS growth. The big gap from last year to this year hammer home the reasons for the rally in the stock. Even in the face of a couple of disappointing earnings reports the stock has done very well as it’s commanded a healthy growth premium over the last several years.

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