Critical Review: TAL Education Group (TAL) versus K12 (LRN)
TAL Education Group (NYSE: TAL) and K12 (NYSE:LRN) are both consumer discretionary companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, earnings, institutional ownership, dividends, valuation, analyst recommendations and risk.
Insider and Institutional Ownership
8.6% of TAL Education Group shares are held by institutional investors. Comparatively, 79.5% of K12 shares are held by institutional investors. 18.3% of K12 shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
This is a breakdown of current ratings and recommmendations for TAL Education Group and K12, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|TAL Education Group||0||2||8||0||2.80|
TAL Education Group presently has a consensus target price of $28.29, indicating a potential downside of 19.62%. K12 has a consensus target price of $18.50, indicating a potential upside of 5.96%. Given K12’s stronger consensus rating and higher probable upside, analysts plainly believe K12 is more favorable than TAL Education Group.
This table compares TAL Education Group and K12’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|TAL Education Group||11.14%||19.47%||7.05%|
Valuation and Earnings
This table compares TAL Education Group and K12’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|TAL Education Group||$1.17 billion||14.87||$182.99 million||$0.24||145.66|
|K12||$888.52 million||0.80||$35.91 million||N/A||N/A|
TAL Education Group has higher revenue and earnings than K12.
Volatility and Risk
TAL Education Group has a beta of 0.26, indicating that its share price is 74% less volatile than the S&P 500. Comparatively, K12 has a beta of -0.23, indicating that its share price is 123% less volatile than the S&P 500.
TAL Education Group beats K12 on 9 of the 13 factors compared between the two stocks.
TAL Education Group Company Profile
TAL Education Group is a holding company for a group of companies engaged in provision of after-school tutoring programs for primary and secondary school students in the People’s Republic of China (the PRC). The Company is a K-12 after-school tutoring services provider in China. The Company’s Xueersi Peiyou small classes course consists of approximately four semesters, which include approximately two school semesters in Spring and Fall, and approximately two holiday semesters in summer and winter. It operates a Website, www.jzb.com, which is an online education platform in China. It offers personalized premium services under its Zhikang brand. It offers online courses through www.xueersi.com. Through www.xueersi.com, the Company offers online courses on mathematics, English, Chinese, physics, chemistry, biology and other subjects. It also offers select online courses through other Websites. The Company has over 10 call centers in Beijing, Shanghai, Tianjin, Guangzhou and Shenzhen.
K12 Company Profile
K12 Inc. (K12) is a technology-based education company. The Company offers curriculum, software systems and educational services designed to facilitate individualized learning for students in kindergarten through 12th grade (K-12). It provides a continuum of technology-based educational products and solutions to public school districts, public schools, virtual charter schools, private schools and families. The Company offers a set of products and services primarily to three lines of business, which include Managed Public School Programs, which consists of virtual and blended schools; Institutional business, which includes educational products and services sold to school districts, public schools and other educational institutions, and Private Pay Schools and Other, which includes private schools, including international, for which it charges student tuition and direct consumer sales. It sells individual online courses and supplemental educational products directly to families.
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