TRINET GROUP INC (TNET)
US8962881079 - Common Stock
We assign a fundamental rating of 5 out of 10 to TNET. TNET was compared to 81 industry peers in the Professional Services industry. While TNET has a great profitability rating, there are quite some concerns on its financial health. TNET is valued correctly, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
TNET had positive earnings in the past year.
TNET had a positive operating cash flow in the past year.
TNET had positive earnings in each of the past 5 years.
In the past 5 years TNET always reported a positive cash flow from operatings.
1.2 Ratios
TNET has a Return On Assets of 7.05%. This is in the better half of the industry: TNET outperforms 70.51% of its industry peers.
Looking at the Return On Equity, with a value of 203.88%, TNET belongs to the top of the industry, outperforming 97.44% of the companies in the same industry.
TNET has a better Return On Invested Capital (18.89%) than 83.33% of its industry peers.
TNET had an Average Return On Invested Capital over the past 3 years of 24.44%. This is significantly above the industry average of 17.86%.
The 3 year average ROIC (24.44%) for TNET is well above the current ROIC(18.89%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.05% | ||
| ROE | 203.88% | ||
| ROIC | 18.89% |
ROA(3y)10.23%
ROA(5y)9.47%
ROE(3y)188.31%
ROE(5y)130.88%
ROIC(3y)24.44%
ROIC(5y)22.92%
1.3 Margins
The Profit Margin of TNET (5.29%) is better than 62.82% of its industry peers.
In the last couple of years the Profit Margin of TNET has grown nicely.
TNET's Operating Margin of 6.98% is in line compared to the rest of the industry. TNET outperforms 55.13% of its industry peers.
In the last couple of years the Operating Margin of TNET has grown nicely.
TNET's Gross Margin of 19.65% is on the low side compared to the rest of the industry. TNET is outperformed by 80.77% of its industry peers.
In the last couple of years the Gross Margin of TNET has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 6.98% | ||
| PM (TTM) | 5.29% | ||
| GM | 19.65% |
OM growth 3Y1.46%
OM growth 5Y5.87%
PM growth 3Y4.16%
PM growth 5Y6.81%
GM growth 3Y4.43%
GM growth 5Y3.39%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so TNET is creating value.
Compared to 1 year ago, TNET has less shares outstanding
Compared to 5 years ago, TNET has less shares outstanding
The debt/assets ratio for TNET is higher compared to a year ago.
2.2 Solvency
TNET has an Altman-Z score of 2.10. This is not the best score and indicates that TNET is in the grey zone with still only limited risk for bankruptcy at the moment.
TNET has a Altman-Z score of 2.10. This is in the lower half of the industry: TNET underperforms 66.67% of its industry peers.
TNET has a debt to FCF ratio of 4.62. This is a neutral value as TNET would need 4.62 years to pay back of all of its debts.
TNET has a Debt to FCF ratio of 4.62. This is comparable to the rest of the industry: TNET outperforms 51.28% of its industry peers.
A Debt/Equity ratio of 8.28 is on the high side and indicates that TNET has dependencies on debt financing.
Looking at the Debt to Equity ratio, with a value of 8.28, TNET is doing worse than 93.59% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 8.28 | ||
| Debt/FCF | 4.62 | ||
| Altman-Z | 2.1 |
ROIC/WACC2.1
WACC8.99%
2.3 Liquidity
A Current Ratio of 1.07 indicates that TNET should not have too much problems paying its short term obligations.
The Current ratio of TNET (1.07) is worse than 70.51% of its industry peers.
TNET has a Quick Ratio of 1.07. This is a normal value and indicates that TNET is financially healthy and should not expect problems in meeting its short term obligations.
The Quick ratio of TNET (1.07) is worse than 69.23% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.07 | ||
| Quick Ratio | 1.07 |
3. Growth
3.1 Past
The earnings per share for TNET have decreased strongly by -10.90% in the last year.
Measured over the past years, TNET shows a very strong growth in Earnings Per Share. The EPS has been growing by 20.79% on average per year.
The Revenue has been growing slightly by 1.41% in the past year.
Measured over the past years, TNET shows a small growth in Revenue. The Revenue has been growing by 7.04% on average per year.
EPS 1Y (TTM)-10.9%
EPS 3Y20.35%
EPS 5Y20.79%
EPS Q2Q%-38.74%
Revenue 1Y (TTM)1.41%
Revenue growth 3Y6.86%
Revenue growth 5Y7.04%
Sales Q2Q%1.23%
3.2 Future
Based on estimates for the next years, TNET will show a small growth in Earnings Per Share. The EPS will grow by 1.78% on average per year.
TNET is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.47% yearly.
EPS Next Y-32.4%
EPS Next 2Y-14.3%
EPS Next 3Y-4.68%
EPS Next 5Y1.78%
Revenue Next Year1.2%
Revenue Next 2Y3.27%
Revenue Next 3Y4.47%
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 13.98, TNET is valued correctly.
80.77% of the companies in the same industry are more expensive than TNET, based on the Price/Earnings ratio.
TNET is valuated rather cheaply when we compare the Price/Earnings ratio to 27.55, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 15.88, the valuation of TNET can be described as correct.
66.67% of the companies in the same industry are more expensive than TNET, based on the Price/Forward Earnings ratio.
TNET is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 24.00, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.98 | ||
| Fwd PE | 15.88 |
4.2 Price Multiples
67.95% of the companies in the same industry are more expensive than TNET, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, TNET is valued a bit cheaper than the industry average as 66.67% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.38 | ||
| EV/EBITDA | 12.13 |
4.3 Compensation for Growth
TNET has an outstanding profitability rating, which may justify a higher PE ratio.
TNET's earnings are expected to decrease with -4.68% in the coming years. This may justify a cheaper valuation.
PEG (NY)N/A
PEG (5Y)0.67
EPS Next 2Y-14.3%
EPS Next 3Y-4.68%
5. Dividend
5.1 Amount
TNET has a Yearly Dividend Yield of 1.13%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 1.85, TNET pays a bit more dividend than its industry peers.
With a Dividend Yield of 1.13, TNET pays less dividend than the S&P500 average, which is at 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.13% |
5.2 History
TNET is new to the dividend game and has less than 3 years of track record.
Dividend Growth(5Y)N/A
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
DPN/A
EPS Next 2Y-14.3%
EPS Next 3Y-4.68%
TRINET GROUP INC
NYSE:TNET (12/26/2024, 8:04:00 PM)
After market: 90.29 0 (0%)90.29
-0.21 (-0.23%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryProfessional Services
Earnings (Last)
Earnings (Next)
Inst Owners92.76%
Inst Owner Change2.5%
Ins Owners1.54%
Ins Owner Change1.11%
Market Cap4.48B
Analysts78.33
Price Target98.43 (9.02%)
Short Float %2.89%
Short Ratio3.42
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.13% |
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)2.11%
Min EPS beat(2)-12.75%
Max EPS beat(2)16.97%
EPS beat(4)2
Avg EPS beat(4)5.48%
Min EPS beat(4)-13.93%
Max EPS beat(4)31.63%
EPS beat(8)6
Avg EPS beat(8)38.92%
EPS beat(12)10
Avg EPS beat(12)45.07%
EPS beat(16)14
Avg EPS beat(16)49.14%
Revenue beat(2)0
Avg Revenue beat(2)-1.63%
Min Revenue beat(2)-2.37%
Max Revenue beat(2)-0.89%
Revenue beat(4)0
Avg Revenue beat(4)-1.98%
Min Revenue beat(4)-2.43%
Max Revenue beat(4)-0.89%
Revenue beat(8)0
Avg Revenue beat(8)-2%
Revenue beat(12)3
Avg Revenue beat(12)76.29%
Revenue beat(16)7
Avg Revenue beat(16)145.76%
PT rev (1m)-18.91%
PT rev (3m)-21.06%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-80.93%
EPS NY rev (1m)0.17%
EPS NY rev (3m)-15.28%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-1.62%
Revenue NY rev (1m)0.12%
Revenue NY rev (3m)-0.99%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.98 | ||
| Fwd PE | 15.88 | ||
| P/S | 0.9 | ||
| P/FCF | 19.38 | ||
| P/OCF | 14.35 | ||
| P/B | 34.7 | ||
| P/tB | N/A | ||
| EV/EBITDA | 12.13 |
EPS(TTM)6.46
EY7.15%
EPS(NY)5.68
Fwd EY6.3%
FCF(TTM)4.66
FCFY5.16%
OCF(TTM)6.29
OCFY6.97%
SpS100.28
BVpS2.6
TBVpS-10.33
PEG (NY)N/A
PEG (5Y)0.67
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.05% | ||
| ROE | 203.88% | ||
| ROCE | 26.92% | ||
| ROIC | 18.89% | ||
| ROICexc | 24.24% | ||
| ROICexgc | 61.05% | ||
| OM | 6.98% | ||
| PM (TTM) | 5.29% | ||
| GM | 19.65% | ||
| FCFM | 4.65% |
ROA(3y)10.23%
ROA(5y)9.47%
ROE(3y)188.31%
ROE(5y)130.88%
ROIC(3y)24.44%
ROIC(5y)22.92%
ROICexc(3y)37.7%
ROICexc(5y)34.16%
ROICexgc(3y)85.62%
ROICexgc(5y)69.89%
ROCE(3y)33.95%
ROCE(5y)31.5%
ROICexcg growth 3Y22%
ROICexcg growth 5Y17.21%
ROICexc growth 3Y1.72%
ROICexc growth 5Y6.63%
OM growth 3Y1.46%
OM growth 5Y5.87%
PM growth 3Y4.16%
PM growth 5Y6.81%
GM growth 3Y4.43%
GM growth 5Y3.39%
F-Score5
Asset Turnover1.33
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 8.28 | ||
| Debt/FCF | 4.62 | ||
| Debt/EBITDA | 2.53 | ||
| Cap/Depr | 108% | ||
| Cap/Sales | 1.63% | ||
| Interest Coverage | 5.88 | ||
| Cash Conversion | 73.93% | ||
| Profit Quality | 87.83% | ||
| Current Ratio | 1.07 | ||
| Quick Ratio | 1.07 | ||
| Altman-Z | 2.1 |
F-Score5
WACC8.99%
ROIC/WACC2.1
Cap/Depr(3y)69.46%
Cap/Depr(5y)68.21%
Cap/Sales(3y)1.18%
Cap/Sales(5y)1.12%
Profit Quality(3y)106.84%
Profit Quality(5y)141.79%
High Growth Momentum
Growth
EPS 1Y (TTM)-10.9%
EPS 3Y20.35%
EPS 5Y20.79%
EPS Q2Q%-38.74%
EPS Next Y-32.4%
EPS Next 2Y-14.3%
EPS Next 3Y-4.68%
EPS Next 5Y1.78%
Revenue 1Y (TTM)1.41%
Revenue growth 3Y6.86%
Revenue growth 5Y7.04%
Sales Q2Q%1.23%
Revenue Next Year1.2%
Revenue Next 2Y3.27%
Revenue Next 3Y4.47%
Revenue Next 5YN/A
EBIT growth 1Y-20.78%
EBIT growth 3Y8.42%
EBIT growth 5Y13.32%
EBIT Next Year0.02%
EBIT Next 3Y2.35%
EBIT Next 5Y6.77%
FCF growth 1Y-11.15%
FCF growth 3Y-2.69%
FCF growth 5YN/A
OCF growth 1Y0.65%
OCF growth 3Y-0.06%
OCF growth 5YN/A