Generally speaking, investors are inspired to be stock pickers by the potential to find the big winners. Mistakes are inevitable, but a single top stock pick can cover any losses, and so much more. One such superstar is TAL Education Group (NYSE:TAL), which saw its share price soar 324% in three years. It's also up 42% in about a month. This could be related to the recent financial results that were recently released - you could check the most recent data by reading our company report.

Since the stock has added US$460m to its market cap in the past week alone, let's see if underlying performance has been driving long-term returns.

Check out our latest analysis for TAL Education Group

There is no denying that markets are sometimes efficient, but prices do not always reflect underlying business performance. One way to examine how market sentiment has changed over time is to look at the interaction between a company's share price and its earnings per share (EPS).

During three years of share price growth, TAL Education Group moved from a loss to profitability. Given the importance of this milestone, it's not overly surprising that the share price has increased strongly.

The company's earnings per share (over time) is depicted in the image below (click to see the exact numbers).

We know that TAL Education Group has improved its bottom line over the last three years, but what does the future have in store? If you are thinking of buying or selling TAL Education Group stock, you should check out this FREE detailed report on its balance sheet.

A Different Perspective

Investors in TAL Education Group had a tough year, with a total loss of 8.2%, against a market gain of about 22%. However, keep in mind that even the best stocks will sometimes underperform the market over a twelve month period. Unfortunately, longer term shareholders are suffering worse, given the loss of 12% doled out over the last five years. We would want clear information suggesting the company will grow, before taking the view that the share price will stabilize. Before deciding if you like the current share price, check how TAL Education Group scores on these 3 valuation metrics.

If you like to buy stocks alongside management, then you might just love this free list of companies. (Hint: many of them are unnoticed AND have attractive valuation).

Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on American exchanges.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.