Using an unlevered Free Cash Flow to Firm (FCFF) model, we project TAL Education Group's cash flows over 5 years with line-by-line expense modeling. Revenue is projected revenue growing from 23.0% to -9.0% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 11, DPO 45, DIO 30). At a 7.3% WACC with mid-year discounting, the terminal value (304% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 11.6x to Year 6 EBITDA. After subtracting net debt, the equity value implies a fair price of $9.53 per share, suggesting TAL is overvalued by 16.4% at the current price of $11.40.
Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.
| 2027 | 2028 | 2029 | 2030 | 2031 | Terminal | |
|---|---|---|---|---|---|---|
| Profit Before Tax | -83 | -99 | -109 | -83 | -76 | -78 |
| (−) Net Interest | 1 | 2 | 2 | 1 | 1 | 1 |
| (+) D&A | 118 | 124 | 167 | 215 | 248 | 254 |
| EBITDA | 36 | 27 | 60 | 133 | 173 | 177 |
| (−) Tax | 0 | 0 | 0 | 0 | 0 | — |
| (−) CapEx | 275 | 326 | 361 | 275 | 251 | — |
| (−) ΔWC | 51 | 8 | 5 | -13 | -4 | — |
| Free Cash Flow (FCF) | -289 | -308 | -307 | -129 | -74 | — |
| Peers' EBITDA Multiple | 11.6x | |||||
| Terminal Value | 2,049 | |||||
| WACC / Discount Rate | 7.26% | |||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5 |
| Present Value of FCF | -279 | -277 | -257 | -101 | -54 | 1,443 |
| Enterprise Value | 475 | |||||
| Projection Period | -969 | -204.1% | ||||
| Terminal Value | 1,443 | 304.1% | ||||
| (−) Current Net Debt | (1,364) | |||||
| Equity Value | 1,839 | |||||
| (÷) Outstanding Shares | 193M | |||||
| Fair Price | $10 | -16.4% | ||||
| WACC \ EV/EBITDA Exit Multiple | 7.6x | 9.6x | 11.6x | 13.6x | 15.6x |
|---|---|---|---|---|---|
| 5.3% | $7 | $9 | $10 | $12 | $13 |
| 6.3% | $7 | $8 | $10 | $11 | $13 |
| 7.3% | $7 | $8 | $10 | $11 | $12 |
| 8.3% | $7 | $8 | $9 | $11 | $12 |
| 9.3% | $7 | $8 | $9 | $10 | $11 |
Current price: $11.40. Green = undervalued, Red = overvalued.
Based on default parameters
Using an unlevered Free Cash Flow to Firm (FCFF) model, we project TAL Education Group's cash flows over 10 years with analyst estimates for the first 3–5 years, fading toward long-term GDP growth for the remaining years with line-by-line expense modeling. Revenue is projected revenue growing from 23.0% to 1.0% annually, with expenses (COGS, SG&A, R&D) held at historical ratios. Depreciation is computed from a vintage matrix based on a 5-year useful life. Working capital is modeled using historical turnover days (DSO 11, DPO 45, DIO 30). At a 7.3% WACC with mid-year discounting, the terminal value (0% of enterprise value) is derived by applying the industry peer median EV/EBITDA multiple of 11.6x to Year 11 EBITDA. After subtracting net debt, the equity value implies a fair price of $6.74 per share, suggesting TAL is overvalued by 40.9% at the current price of $11.40.
Adjust parameters to explore scenarios. Changes are for exploration only and do not affect saved valuations.
| 2027 | 2028 | 2029 | 2030 | 2031 | 2032 | 2033 | 2034 | 2035 | 2036 | Terminal | |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Profit Before Tax | -83 | -99 | -109 | -83 | -76 | -70 | -67 | -65 | -64 | -65 | -67 |
| (−) Net Interest | 1 | 2 | 2 | 1 | 1 | 1 | 1 | 1 | 1 | 1 | 1 |
| (+) D&A | 118 | 124 | 167 | 215 | 248 | 298 | 289 | 268 | 239 | 227 | 232 |
| EBITDA | 36 | 27 | 60 | 133 | 173 | 228 | 224 | 204 | 176 | 163 | 167 |
| (−) Tax | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | — |
| (−) CapEx | 275 | 326 | 361 | 275 | 251 | 233 | 222 | 215 | 213 | 215 | — |
| (−) ΔWC | 51 | 8 | 5 | -13 | -4 | -3 | -2 | -1 | -0 | 0 | — |
| Free Cash Flow (FCF) | -289 | -308 | -307 | -129 | -74 | -2 | 4 | -9 | -37 | -53 | — |
| Peers' EBITDA Multiple | 11.6x | ||||||||||
| Terminal Value | 1,927 | ||||||||||
| WACC / Discount Rate | 7.26% | ||||||||||
| Timing of FCF (mid year) | 0.5 | 1.5 | 2.5 | 3.5 | 4.5 | 5.5 | 6.5 | 7.5 | 8.5 | 9.5 | 5 |
| Present Value of FCF | -279 | -277 | -257 | -101 | -54 | -1 | 2 | -6 | -20 | -27 | 956 |
| Enterprise Value | -64 | ||||||||||
| Projection Period | -1,021 | 0.0% | |||||||||
| Terminal Value | 956 | 0.0% | |||||||||
| (−) Current Net Debt | (1,364) | ||||||||||
| Equity Value | 1,300 | ||||||||||
| (÷) Outstanding Shares | 193M | ||||||||||
| Fair Price | $7 | -40.9% | |||||||||
| WACC \ EV/EBITDA Exit Multiple | 7.6x | 9.6x | 11.6x | 13.6x | 15.6x |
|---|---|---|---|---|---|
| 5.3% | $5 | $6 | $8 | $9 | $10 |
| 6.3% | $5 | $6 | $7 | $8 | $9 |
| 7.3% | $5 | $6 | $7 | $8 | $8 |
| 8.3% | $5 | $6 | $6 | $7 | $8 |
| 9.3% | $5 | $5 | $6 | $7 | $8 |
Current price: $11.40. Green = undervalued, Red = overvalued.
Based on default parameters
Using the industry peer median P/E Multiples multiple (trailing + forward), TAL Education Group (TAL) has a fair value of $29.73 based on 10 comparable companies in the Education & Training Services industry.
USD in millions except Fair Price. Subject company highlighted.
| Mkt Cap ($M) | Trailing P/E | Forward P/E | |
|---|---|---|---|
| TAL Education GroupTAL | 2,199 | 4.1x | 18.1x |
| New Oriental Education & Technology Group Inc. | 8,532 | 23.3x | 23.3x |
| Sprouts Farmers Market, Inc. | 7,619 | 15.3x | 14.5x |
| Ingredion Incorporated | 6,771 | 9.6x | 10.2x |
| Conagra Brands, Inc. | 6,758 | 5.9x | 8.3x |
| Lamb Weston Holdings, Inc. | 5,800 | 16.8x | 15.2x |
| Ollie's Bargain Outlet Holdings, Inc. | 5,011 | 21.1x | 25.0x |
| Graham Holdings Company | 4,925 | 17.1x | 18.2x |
| Laureate Education, Inc. | 4,593 | 17.4x | 20.3x |
| Grand Canyon Education, Inc. | 4,404 | 21.5x | 23.1x |
| e.l.f. Beauty, Inc. | 3,594 | 31.7x | 19.6x |
| Industry Median | 17.2x | 18.9x | |
| (*) Profit after tax | 533 | 121 | |
| Equity Value | 9,178 | 2,292 | |
| (/) Outstanding shares | 193 | 193 | |
| Fair Price | $48 | $12 | |
Using the industry peer median EV/EBITDA multiple (trailing + forward), TAL Education Group (TAL) has a fair value of $24.51 based on 10 comparable companies in the Education & Training Services industry.
USD in millions except Fair Price. Subject company highlighted.
| Mkt Cap ($M) | Trailing EV/EBITDA | Forward EV/EBITDA | |
|---|---|---|---|
| TAL Education GroupTAL | 2,199 | 3.0x | 3.0x |
| New Oriental Education & Technology Group Inc. | 8,532 | 13.0x | 14.8x |
| Sprouts Farmers Market, Inc. | 7,619 | 9.3x | 8.7x |
| Ingredion Incorporated | 6,771 | 6.1x | 5.9x |
| Conagra Brands, Inc. | 6,758 | 7.5x | 7.7x |
| Lamb Weston Holdings, Inc. | 5,800 | 9.2x | 9.1x |
| Ollie's Bargain Outlet Holdings, Inc. | 5,011 | 14.4x | 16.7x |
| Graham Holdings Company | 4,925 | 15.1x | 15.4x |
| Laureate Education, Inc. | 4,593 | 10.1x | 11.1x |
| Grand Canyon Education, Inc. | 4,404 | 13.1x | 14.7x |
| e.l.f. Beauty, Inc. | 3,594 | 18.2x | 14.9x |
| Industry Median | 11.6x | 12.9x | |
| (*) EBITDA | 277 | 274 | |
| = Enterprise Value | 3,200 | 3,531 | |
| (-) Net Debt | -1,364 | -1,364 | |
| Equity Value | 4,564 | 4,894 | |
| (/) Outstanding shares | 193 | 193 | |
| Fair Price | $24 | $25 | |
Using the industry peer median EV/Revenue multiple (trailing + forward), TAL Education Group (TAL) has a fair value of $32.04 based on 10 comparable companies in the Education & Training Services industry.
USD in millions except Fair Price. Subject company highlighted.
| Mkt Cap ($M) | Trailing EV/Revenue | Forward EV/Revenue | |
|---|---|---|---|
| TAL Education GroupTAL | 2,199 | 0.3x | 0.3x |
| New Oriental Education & Technology Group Inc. | 8,532 | 1.6x | 1.8x |
| Sprouts Farmers Market, Inc. | 7,619 | 1.1x | 1.0x |
| Ingredion Incorporated | 6,771 | 1.0x | 1.0x |
| Conagra Brands, Inc. | 6,758 | 1.3x | 1.3x |
| Lamb Weston Holdings, Inc. | 5,800 | 1.5x | 1.5x |
| Ollie's Bargain Outlet Holdings, Inc. | 5,011 | 2.1x | 2.4x |
| Graham Holdings Company | 4,925 | 1.3x | 1.3x |
| Laureate Education, Inc. | 4,593 | 3.1x | 3.4x |
| Grand Canyon Education, Inc. | 4,404 | 4.1x | 4.6x |
| e.l.f. Beauty, Inc. | 3,594 | 2.9x | 2.3x |
| Industry Median | 1.6x | 1.7x | |
| (*) Revenue | 3,020 | 2,989 | |
| = Enterprise Value | 4,694 | 4,942 | |
| (-) Net Debt | -1,364 | -1,364 | |
| Equity Value | 6,058 | 6,306 | |
| (/) Outstanding shares | 193 | 193 | |
| Fair Price | $31 | $33 | |
Using the PEG framework with analyst consensus forward EPS growth of 8.0%, the company has a fair value of $6.52 based on NTM EPS (FY2027) of $0.81.
| EPS Growth RateForward | -22.6% |
| Adjusted Growth (clamped 8–25%)Clamped | 8.0% |
| Fair P/E | 8.0x |
| NTM EPS (FY2027) | $0.81 |
| Fair Value | $6.52 |
| Period | EPS Est. | Growth | Analysts |
|---|---|---|---|
| FY2026 (actual) | $2.76 | — | — |
| FY2027E | $0.81 | -70.5% | 10 |
| FY2028E | $1.04 | +27.4% | 13 |
| FY2029E | $1.28 | +23.3% | 8 |
3Y Forward EPS CAGR: -22.6%
| Year | Net Income | EPS | YoY |
|---|---|---|---|
| FY2022 | $-1.1B | $-15.90 | — |
| FY2023 | $-135.1M | $-1.92 | — |
| FY2024 | $-3.6M | $-0.05 | — |
| FY2025 | $84.7M | $1.26 | — |
| FY2026 | $532.7M | $2.76 | +119.0% |
4Y Historical EPS CAGR: 119.0%
Disclaimer: Sweet Value Lab provides estimated intrinsic values for informational purposes only. This is not financial advice. All models rely on assumptions that may not reflect future performance. Always do your own research before making investment decisions.