UPDATE: Goldman Sachs Raises PT on Xueda Education Group Following In-Line 1Q13 Results

In a report published Friday, Goldman Sachs analyst Fei Fang reiterated a Sell rating on Xueda Education Group

, and slightly raised the price target from $2.80 to $3.00. In the report, Fang noted, “Net revenues of US$83.9mn were 5%/6% above GSe/Bloomberg consensus. Non-GAAP EPADS of US$0.05 was in-line with GSe/consensus. 2Q13 net revenues were guided to US$110-113mn, +15% yoy at the midpoint, 4%/2% below GSe/consensus. 2Q13 non-GAAP EPADS was guided to US$0.25-0.26, 1 cent above GSe and in-line with consensus. Takeaways: (1) Net revenues grew 25% yoy, exceeding management's previous guidance, driven by the balanced +8% yoy hourly rate and +11% yoy course hours. Despite the stronger 1Q, management maintained the full-year growth guidance at 17%-20% yoy. Xueda added a net of 6 learning centers in 1Q13 (versus 47 in 1Q12), suggesting the company's continued focus on profitability. (2) Gross margin of 28.3% improved 3.3pp yoy, a trend that we believe indicates the rising utilization of teachers and facilities across the network, helped by the sector's improving competitive dynamics. (3) SG&A as % of revenues remained stable yoy.” Xueda Education Group closed on Thursday at $3.06.