TAL(US:TAL) EBSCN·2025-08-04 08:18Investment Rating - The report maintains a "Buy" rating for the company, indicating a strong potential for investment returns over the next 6-12 months [5]. Core Insights - The company reported a revenue of $575 million for FY26Q1, representing a year-on-year increase of 38.8%, and a net profit attributable to shareholders of $31.28 million, up 174.4% year-on-year [1]. - The learning services segment, particularly small class courses, continues to be the largest revenue contributor, with a retention rate of approximately 80% [1]. - Deferred revenue at the end of FY26Q1 reached $968 million, reflecting a 50.8% year-on-year growth, indicating strong demand resilience [1]. - The company plans to continue expanding the number of learning centers to drive revenue growth, although growth rates are expected to slow compared to FY25 due to increasing base figures [1]. Revenue and Profitability - For FY26Q1, the company achieved a Non-GAAP net profit of $42.05 million, a 42.0% increase year-on-year, with a gross margin of 54.9%, up 3.1 percentage points [3]. - The operating profit margin for FY26Q1 was 2.5%, an increase of 6.7 percentage points year-on-year, while the Non-GAAP operating profit margin was 4.4%, up 4.2 percentage points [3]. - The company expects continued strong revenue growth in FY26Q2, which is anticipated to be a peak business season [3]. Financial Forecasts - The company forecasts net profits of $144 million, $234 million, and $349 million for FY26, FY27, and FY28, respectively, with corresponding EPS of $0.71, $1.15, and $1.72 [3][4]. - The projected P/E ratios for FY26, FY27, and FY28 are 45x, 28x, and 19x, respectively, indicating a favorable valuation outlook as profitability improves [3][4].