TAL(US:TAL) First Shanghai Securities·2025-02-13 04:16Investment Rating - The report assigns a "Buy" rating to the company with a target price of $17.50, indicating a potential upside of 24.80% from the current price [2][5]. Core Insights - The company has demonstrated better-than-expected performance, particularly in its smart learning machine business, which is experiencing rapid growth [5]. - The company reported a revenue of $606 million for the third quarter of FY25, representing a year-on-year increase of 62.4%, surpassing market expectations of 39% [5]. - The smart learning machine sales reached $1.6 billion in FY25Q3, marking an 88% year-on-year growth, with a sales volume of 356,000 units, up 65% [5]. - The company is expanding its offline educational training points, with an estimated 430-450 locations, maintaining strong retention and utilization rates [5]. Financial Summary - Total revenue for FY24 is projected at $1.49 billion, a 46.15% increase from the previous year, with a forecast of $2.19 billion for FY25 [3][5]. - Non-GAAP net profit is expected to turn positive in FY25, reaching $128.7 million, with further growth to $250.5 million in FY26 and $350.6 million in FY27 [3][5]. - The company maintains a strong cash position with $3.8 billion in cash and short-term investments, and no bank debt [5]. Business Growth - The company is focusing on enhancing its educational resources and management capabilities, particularly in the smart learning machine sector, which is expected to continue its rapid development [5]. - The introduction of the Xbook smart learning machine has received positive feedback from parents and is positioned to disrupt traditional learning machine manufacturers [5].