Since reaching an intraday high of $15.30 on February 20 this year, TAL Education Group (TAL.US) has entered a period of substantial sideways consolidation and stagnation. On April 25, TAL's intraday price touched a periodic low of $8.50, and it took nearly a month for the stock to climb back to around $11, where it continued to trade sideways through August.

In early August, TAL disclosed its Q1 FY26 earnings report. Based on key financial metrics, TAL surpassed the previous year's levels across revenue structure, operational performance, and financial condition. Against this backdrop, investors naturally began to anticipate the next upward rally in the secondary market. However, after touching an intraday high of $11.74 on August 13, TAL's stock price began to decline steadily, and the company's share price has now fallen below $10.50.

**Multiple Executive Share Sales Affecting Market Sentiment?**

The analysis reveals that aside from the early April crash in the three major U.S. stock indices that dragged down TAL's price, the most significant impact on TAL's stock came from market volatility following the annual report disclosure on April 24. After the earnings release on April 24, shareholders continuously sold at lower prices, creating substantial selling pressure. Daily trading volume surged dramatically to 42.83 million shares, surpassing the previous record of 40.17 million shares set on September 30 last year.

Looking at the Bollinger Bands, TAL's stock price on April 24 rapidly fell from the middle band to near the lower band, showing clear oversold signals. Therefore, after touching the periodic low the next day, TAL's stock began a sustained rebound until the intraday high on May 19 reached the upper Bollinger Band, when the stock price returned to the $11 range.

However, the rally from April 24 to May 19 was not a straight upward move, but rather gained momentum after experiencing "three consecutive declines" from April 29 to May 1. Moreover, from a volume perspective, TAL's trading volume during these three days significantly decreased compared to previous days. After reaching over 40 million shares in daily volume on April 24, TAL maintained over 10 million shares in daily volume on April 25 and 28, but starting April 29, daily volume quickly dropped below 10 million shares, reaching only 3.56 million shares on May 1. It didn't return to over 10 million shares until May 13.

The decline to periodic lows with weak external buying interest suggests certain factors influenced external capital's valuation judgment of the company at that time. Multiple executive share sales may be one of these factors.

Analysis shows that on April 28, TAL's President and CFO Peng Zhuangzhuang sold 15,938 shares, realizing $146,000 (approximately 1.05 million RMB). On the same day, independent director Feng Yan also sold 11,409 shares, realizing $104,500.

In fact, TAL executive share sales began in January this year. On January 7, TAL's COO Liu Yachao sold 24,000 shares, realizing $281,000 (approximately 2.04 million RMB).

After TAL's Q1 FY26 earnings release, the company's stock price quickly fell nearly 3% the next day, returning to its previous sideways trading pattern. From August's intraday movements and volume conditions, the market frequently showed patterns of rallies followed by pullbacks and bottom-fishing rebounds. Although there were "three consecutive positive days" from August 4-6, they all showed "volume-less rallies."

From a technical trend perspective, TAL still shows some "washout" characteristics, but there's also the possibility of main capital accumulating for the next rally. Looking at the Bollinger Bands, on August 13, TAL's stock price touched the upper band and began a technical regression toward the middle band, touching the middle band line with the day's low on August 20, and fluctuating near the Bollinger middle band until August 25.

However, after August 25, the company's stock price did not rally upward but broke below the line, declining toward the lower Bollinger Band. At this August 25 juncture, TAL "coincidentally" experienced another executive share sale. According to documents filed with the U.S. SEC, TAL's CTO Tian Mi sold 53,655 shares on August 25, realizing $583,200 (approximately 4.17 million RMB).

In the trading days following the executive sale, TAL again showed shrinking trading activity. On August 28, TAL's daily trading volume dropped to only 2.01 million shares, creating a new low for daily volume in late August.

**Using Rising Performance to Offset "Share Sale" Headwinds?**

TAL's disclosed Q1 FY26 earnings showed: net revenue of $575 million, up 38.8% year-over-year; gross profit of $315 million, up 47.3% year-over-year. Gross margin was 54.9%, compared to 51.7% in the same period last year.

As mentioned above, TAL achieved improvements over the previous year's levels across revenue structure, operational performance, and financial condition. These financial metrics well reflect TAL's positive growth momentum during the reporting period, so "poor business development" is clearly not the reason for TAL executives' "group" share sales. However, rising performance may serve as a hedging tool to "offset share sale headwinds" to some extent.

As mentioned earlier, TAL's COO Liu Yachao conducted a share sale on January 7, after which the company's stock experienced about 10 trading days of sideways stagnation, with the stock price even falling to a low of $8.62 on January 22. But on January 23, the company released Q3 FY25 earnings that exceeded market expectations.

On the trading floor, TAL's stock opened 15.06% higher on January 23 and continued rising, with intraday gains exceeding 20% and a closing price of $11.07, creating a new high since December 9 last year. The next day, the stock gained another 5.60%, with intraday highs reaching $11.82, approaching the previous high of $12.14. This above-expectation performance completely offset the negative market impact from executive share sales.

Returning to the present, from the secondary market feedback after the Q1 FY26 earnings, investors clearly view TAL's performance favorably. Due to Q4 FY25's key financial indicators missing expectations, TAL's stock once plummeted nearly 20% in a single day. However, for Q1 FY26, although TAL's total revenue and EBIT still fell short of analyst predictions, the deviation between actual financial data and forecasts was significantly smaller than the previous quarter, which may be one reason the stock gained after the earnings disclosure.

From a profit perspective, TAL's Q1 FY26 performance was significantly better than the same period last year. The company's operating profit was $14.3 million, compared to an operating loss of $17.3 million in the same period last year, achieving a turnaround to profitability. Meanwhile, its non-GAAP operating profit of $25.1 million also outperformed the previous year's $0.9 million.

For net profit, net income attributable to TAL was $31.3 million, a significant 174.56% year-over-year increase. Non-GAAP net income attributable to TAL was $42 million, up 41.89% year-over-year.

From current performance growth trends, TAL's actual financial data shows a tendency to approach or even exceed analyst forecasts, while executives have repeatedly chosen to sell shares during periods of sideways trading or decline, possibly considering using subsequent rising performance to offset share sale headwinds.

Without positive earnings catalysts and amid executive share sale headwinds, TAL's internal and external market sentiment remains unstable, potentially exacerbating stock price volatility. For ordinary investors, the short-term allocation window may still require waiting.