EdTech
All research in EdTech — 3 reports.
TAL is a cash-rich China education company rebuilt around legal enrichment classes, learning devices, and content after the 2021 tutoring crackdown. FY2026 revenue reached about US$3.01 billion (up 33.7%) and net cash is roughly US$3.24 billion, but reported earnings are flattered by about US$347 million of non-operating gains and VIEs supplied 78.6% of revenue. Rating Hold: the rebuild is real, yet normalized earnings, device durability, and China-structure risk leave the stock fairly priced rather than compelling.
Youdao is a NetEase-controlled, US-listed Chinese ADR running an AI-education platform that monetizes learning subscriptions, smart devices, and performance advertising, with fiscal 2025 revenue of about RMB 5.9 billion. The investment debate sits on a single tension: the company has delivered seven straight quarters of operating profitability and RMB 107.3 million of 2025 net income, yet consolidated growth is only low-single-digit (Q1 2026 revenue up just 3.8%), smart devices fell 42.6%, and operating cash flow keeps turning negative even as accounting profit improves. Rating Hold: AI has repaired mix and margins, but weak cash conversion and sharp smart-device deterioration leave too little margin of safety at US$11.64.
A high-engagement learning platform with an asset-light model, strong cash flow, and a net-cash balance sheet (cash and investments of $1.253 billion in 2026 Q1). But low switching costs, free substitutes, and AI reshaping the boundaries of learning keep the moat only moderate. At $112.06, the headline PE is distorted by a one-time $256.7 million tax benefit booked in 2025. Ideal buy at $85-100, acceptable to hold at $100-125, clearly expensive above $165. Rating Watch: a high-quality business whose moat is not yet wide enough to buy aggressively without a clear margin of safety.