Trade-Ideas: TAL Education Group (XRS) Is Today's New Lifetime High Stock

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer or Stephanie Link.

Trade-Ideas LLC identified TAL Education Group ( XRS) as a new lifetime high candidate. In addition to specific proprietary factors, Trade-Ideas identified TAL Education Group as such a stock due to the following factors:

  • XRS has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $26.0 million.
  • XRS has traded 156,730 shares today.
  • XRS is trading at a new lifetime high.

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More details on XRS:

TAL Education Group, together with its subsidiaries, provides K-12 after-school tutoring services under the Xueersi brand name in China. XRS has a PE ratio of 44.5. Currently there are 3 analysts that rate TAL Education Group a buy, no analysts rate it a sell, and 1 rates it a hold.

The average volume for TAL Education Group has been 682,900 shares per day over the past 30 days. TAL Education Group has a market cap of $2.3 billion and is part of the services sector and diversified services industry. Shares are up 33.9% year-to-date as of the close of trading on Thursday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates TAL Education Group as a buy. The company's strengths can be seen in multiple areas, such as its robust revenue growth, impressive record of earnings per share growth, notable return on equity, expanding profit margins and solid stock price performance. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:
  • The revenue growth greatly exceeded the industry average of 1.7%. Since the same quarter one year prior, revenues rose by 45.0%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • TAL EDUCATION GROUP reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, TAL EDUCATION GROUP increased its bottom line by earning $0.75 versus $0.43 in the prior year. This year, the market expects an improvement in earnings ($1.03 versus $0.75).
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. Compared to other companies in the Diversified Consumer Services industry and the overall market, TAL EDUCATION GROUP's return on equity significantly exceeds that of both the industry average and the S&P 500.
  • The gross profit margin for TAL EDUCATION GROUP is rather high; currently it is at 53.17%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 14.99% trails the industry average.
  • Powered by its strong earnings growth of 70.00% and other important driving factors, this stock has surged by 130.65% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.

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