TAL Education (XRS), a Chinese provider of K-12 tutoring services, reported strong fiscal second-quarter results and upbeat forecasts, triggering a sell signal for the stock.
Estimates: EPS down 32% to 53 cents, while revenue climbs 44.5% to $250.5 million.
Results: EPS of 70 cents on revenue of $271. million. Total student enrollments jumped 77% to 1.12 million.
Outlook: Fiscal Q3 revenue of $227.5 million-$230.3 million, above Wall Street forecasts for $210.2 million.
Stock: Shares jumped 4.7% to finish at 81.25 on the stock market today and is now 22% extended from its buy point, putting TAL in profit-taking sell territory. The stock broke out last month.
Peer New Oriental Education (EDU) dipped 0.55% after the stock shot through its buy zone Tuesday, rising nearly 10%.
IBD’S TAKE: Late-stage breakouts like New Oriental’s tend to carry more risk than early-stage moves, so learning to count bases is a crucial skill for CAN SLIM investors.
On Tuesday, New Oriental reported EPS rose 15% to 90 cents, in line with views, as revenue climbed 16.5% to $534.1 million, above views for $521.77 million. Total student enrollments jumped 31.2% year-over-year to 1.3 million.
The company sees Q2 revenue of $324.6 million-$335.1 million, better than the consensus at the time for $324.4 million.
Shares of Tarena International (TEDU), a provider of professional education services in China, added 2.5% Thursday.