Head to Head Comparison: TAL Education Group (TAL) & K12 (LRN)

TAL Education Group (NYSE: TAL) and K12 (NYSE:LRN) are both consumer discretionary companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, dividends, profitability, valuation, institutional ownership, earnings and analyst recommendations.

Insider & Institutional Ownership

8.6% of TAL Education Group shares are owned by institutional investors. Comparatively, 79.5% of K12 shares are owned by institutional investors. 18.3% of K12 shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares TAL Education Group and K12’s top-line 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 14.70 $182.99 million $0.24 143.96
K12 $888.52 million 0.80 $35.91 million N/A N/A

TAL Education Group has higher revenue and earnings than K12.

Volatility & Risk

TAL Education Group has a beta of 0.26, indicating that its stock price is 74% less volatile than the S&P 500. Comparatively, K12 has a beta of -0.23, indicating that its stock price is 123% less volatile than the S&P 500.

Profitability

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%
K12 0.05% 3.18% 2.40%

Analyst Recommendations

This is a breakdown of current recommendations and price targets for TAL Education Group and K12, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
TAL Education Group 0 2 8 0 2.80
K12 0 0 2 0 3.00

TAL Education Group currently has a consensus price target of $28.29, suggesting a potential downside of 18.68%. K12 has a consensus price target of $18.50, suggesting a potential upside of 6.14%. Given K12’s stronger consensus rating and higher possible upside, analysts plainly believe K12 is more favorable than TAL Education Group.

Summary

TAL Education Group beats K12 on 8 of the 12 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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