TRINET GROUP INC (TNET) Stock Fundamental Analysis
NYSE:TNET - New York Stock Exchange, Inc. - US8962881079 - Common Stock - Currency: USD
Overall TNET gets a fundamental rating of 4 out of 10. We evaluated TNET against 81 industry peers in the Professional Services industry. TNET has a medium profitability rating, but doesn't score so well on its financial health evaluation. TNET has a valuation in line with the averages, but on the other hand it scores bad on growth.
1. Profitability
1.1 Basic Checks
In the past year TNET was profitable.
In the past year TNET had a positive cash flow from operations.
Each year in the past 5 years TNET has been profitable.
TNET had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 4.20%, TNET is in line with its industry, outperforming 53.85% of the companies in the same industry.
TNET's Return On Equity of 250.72% is amongst the best of the industry. TNET outperforms 98.72% of its industry peers.
Looking at the Return On Invested Capital, with a value of 14.85%, TNET belongs to the top of the industry, outperforming 80.77% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for TNET is significantly above the industry average of 13.70%.
The 3 year average ROIC (24.84%) for TNET is well above the current ROIC(14.85%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.2% | ||
| ROE | 250.72% | ||
| ROIC | 14.85% |
ROA(3y)8.22%
ROA(5y)8.76%
ROE(3y)259.1%
ROE(5y)172.1%
ROIC(3y)24.84%
ROIC(5y)24.11%
1.3 Margins
The Profit Margin of TNET (3.46%) is comparable to the rest of the industry.
TNET's Profit Margin has declined in the last couple of years.
Looking at the Operating Margin, with a value of 4.76%, TNET is in line with its industry, outperforming 43.59% of the companies in the same industry.
In the last couple of years the Operating Margin of TNET has declined.
With a Gross Margin value of 18.05%, TNET is not doing good in the industry: 80.77% of the companies in the same industry are doing better.
In the last couple of years the Gross Margin of TNET has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 4.76% | ||
| PM (TTM) | 3.46% | ||
| GM | 18.05% |
OM growth 3Y-17.57%
OM growth 5Y-3.89%
PM growth 3Y-22.81%
PM growth 5Y-9.04%
GM growth 3Y-2.99%
GM growth 5Y1.21%
2. Health
2.1 Basic Checks
TNET has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
TNET has less shares outstanding than it did 1 year ago.
TNET has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, TNET has an improved debt to assets ratio.
2.2 Solvency
TNET has an Altman-Z score of 1.67. This is a bad value and indicates that TNET is not financially healthy and even has some risk of bankruptcy.
With a Altman-Z score value of 1.67, TNET is not doing good in the industry: 69.23% of the companies in the same industry are doing better.
TNET has a debt to FCF ratio of 4.89. This is a neutral value as TNET would need 4.89 years to pay back of all of its debts.
TNET has a Debt to FCF ratio (4.89) which is comparable to the rest of the industry.
A Debt/Equity ratio of 14.25 is on the high side and indicates that TNET has dependencies on debt financing.
TNET has a Debt to Equity ratio of 14.25. This is amonst the worse of the industry: TNET underperforms 93.59% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 14.25 | ||
| Debt/FCF | 4.89 | ||
| Altman-Z | 1.67 |
ROIC/WACC1.71
WACC8.67%
2.3 Liquidity
TNET has a Current 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.
TNET's Current ratio of 1.07 is on the low side compared to the rest of the industry. TNET is outperformed by 70.51% of its industry peers.
A Quick Ratio of 1.07 indicates that TNET should not have too much problems paying its short term obligations.
TNET has a Quick ratio of 1.07. This is in the lower half of the industry: TNET underperforms 70.51% 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 -31.52% in the last year.
The Earnings Per Share has been growing by 9.74% on average over the past years. This is quite good.
Looking at the last year, TNET shows a small growth in Revenue. The Revenue has grown by 1.67% in the last year.
Measured over the past years, TNET shows a small growth in Revenue. The Revenue has been growing by 5.56% on average per year.
EPS 1Y (TTM)-31.52%
EPS 3Y-2.17%
EPS 5Y9.74%
EPS Q2Q%-72.5%
Revenue 1Y (TTM)1.67%
Revenue growth 3Y3.63%
Revenue growth 5Y5.56%
Sales Q2Q%1.37%
3.2 Future
The Earnings Per Share is expected to grow by 17.99% on average over the next years. This is quite good.
TNET is expected to show a very negative growth in Revenue. In the coming years, the Revenue will decrease by -37.14% yearly.
EPS Next Y-23.21%
EPS Next 2Y-2.44%
EPS Next 3Y4.48%
EPS Next 5Y17.99%
Revenue Next Year1.67%
Revenue Next 2Y2.89%
Revenue Next 3Y-37.14%
Revenue Next 5YN/A
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
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
A Price/Earnings ratio of 13.91 indicates a correct valuation of TNET.
Compared to the rest of the industry, the Price/Earnings ratio of TNET indicates a somewhat cheap valuation: TNET is cheaper than 74.36% of the companies listed in the same industry.
The average S&P500 Price/Earnings ratio is at 29.43. TNET is valued rather cheaply when compared to this.
The Price/Forward Earnings ratio is 18.11, which indicates a rather expensive current valuation of TNET.
Compared to the rest of the industry, the Price/Forward Earnings ratio of TNET is on the same level as its industry peers.
TNET is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 22.67, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.91 | ||
| Fwd PE | 18.11 |
4.2 Price Multiples
TNET's Enterprise Value to EBITDA ratio is in line with the industry average.
TNET's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. TNET is cheaper than 67.95% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 18.18 | ||
| EV/EBITDA | 13.34 |
4.3 Compensation for Growth
The decent profitability rating of TNET may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.43
EPS Next 2Y-2.44%
EPS Next 3Y4.48%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.43%, TNET has a reasonable but not impressive dividend return.
The stock price of TNET dropped by -21.11% in the last 3 months. With lower prices the dividend yield is higher, but it may be a sign investors do not trust the long term dividend.
Compared to an average industry Dividend Yield of 1.93, TNET pays a bit more dividend than its industry peers.
Compared to the average S&P500 Dividend Yield of 2.28, TNET is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.43% |
5.2 History
TNET does not have a reliable dividend history as it only pays dividend since a couple or years.
Dividend Growth(5Y)N/A
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
21.39% of the earnings are spent on dividend by TNET. This is a low number and sustainable payout ratio.
DP21.39%
EPS Next 2Y-2.44%
EPS Next 3Y4.48%
73.71
+0.53 (+0.72%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryProfessional Services
Earnings (Last)
Earnings (Next)
Inst Owners98.53%
Inst Owner Change14.02%
Ins Owners0.72%
Ins Owner Change-2.68%
Market Cap3.65B
Analysts78.33
Price Target97.24 (31.92%)
Short Float %3.6%
Short Ratio5.61
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.43% |
Yearly Dividend0.74
Dividend Growth(5Y)N/A
DP21.39%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)31.06%
Min EPS beat(2)-12.75%
Max EPS beat(2)74.88%
EPS beat(4)2
Avg EPS beat(4)16.29%
Min EPS beat(4)-13.93%
Max EPS beat(4)74.88%
EPS beat(8)6
Avg EPS beat(8)22.46%
EPS beat(12)10
Avg EPS beat(12)42.68%
EPS beat(16)14
Avg EPS beat(16)49.5%
Revenue beat(2)0
Avg Revenue beat(2)-1.73%
Min Revenue beat(2)-2.37%
Max Revenue beat(2)-1.1%
Revenue beat(4)0
Avg Revenue beat(4)-1.65%
Min Revenue beat(4)-2.37%
Max Revenue beat(4)-0.89%
Revenue beat(8)0
Avg Revenue beat(8)-1.87%
Revenue beat(12)2
Avg Revenue beat(12)43.3%
Revenue beat(16)6
Avg Revenue beat(16)118.63%
PT rev (1m)-1.21%
PT rev (3m)-19.89%
EPS NQ rev (1m)-3.52%
EPS NQ rev (3m)-27.94%
EPS NY rev (1m)-28.41%
EPS NY rev (3m)-26.11%
Revenue NQ rev (1m)-1.63%
Revenue NQ rev (3m)-5.41%
Revenue NY rev (1m)-3.21%
Revenue NY rev (3m)-2.51%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.91 | ||
| Fwd PE | 18.11 | ||
| P/S | 0.73 | ||
| P/FCF | 18.18 | ||
| P/OCF | 13.1 | ||
| P/B | 52.96 | ||
| P/tB | N/A | ||
| EV/EBITDA | 13.34 |
EPS(TTM)5.3
EY7.19%
EPS(NY)4.07
Fwd EY5.52%
FCF(TTM)4.05
FCFY5.5%
OCF(TTM)5.63
OCFY7.63%
SpS100.93
BVpS1.39
TBVpS-11.05
PEG (NY)N/A
PEG (5Y)1.43
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.2% | ||
| ROE | 250.72% | ||
| ROCE | 20.91% | ||
| ROIC | 14.85% | ||
| ROICexc | 21.12% | ||
| ROICexgc | 76.34% | ||
| OM | 4.76% | ||
| PM (TTM) | 3.46% | ||
| GM | 18.05% | ||
| FCFM | 4.02% |
ROA(3y)8.22%
ROA(5y)8.76%
ROE(3y)259.1%
ROE(5y)172.1%
ROIC(3y)24.84%
ROIC(5y)24.11%
ROICexc(3y)34.63%
ROICexc(5y)36.12%
ROICexgc(3y)100.94%
ROICexgc(5y)85.02%
ROCE(3y)34.53%
ROCE(5y)32.88%
ROICexcg growth 3Y11.37%
ROICexcg growth 5Y18.81%
ROICexc growth 3Y-15.59%
ROICexc growth 5Y0.75%
OM growth 3Y-17.57%
OM growth 5Y-3.89%
PM growth 3Y-22.81%
PM growth 5Y-9.04%
GM growth 3Y-2.99%
GM growth 5Y1.21%
F-Score6
Asset Turnover1.21
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 14.25 | ||
| Debt/FCF | 4.89 | ||
| Debt/EBITDA | 3.14 | ||
| Cap/Depr | 104% | ||
| Cap/Sales | 1.56% | ||
| Interest Coverage | 4.03 | ||
| Cash Conversion | 89.14% | ||
| Profit Quality | 116.19% | ||
| Current Ratio | 1.07 | ||
| Quick Ratio | 1.07 | ||
| Altman-Z | 1.67 |
F-Score6
WACC8.67%
ROIC/WACC1.71
Cap/Depr(3y)87.87%
Cap/Depr(5y)73.22%
Cap/Sales(3y)1.4%
Cap/Sales(5y)1.19%
Profit Quality(3y)127.49%
Profit Quality(5y)124.52%
High Growth Momentum
Growth
EPS 1Y (TTM)-31.52%
EPS 3Y-2.17%
EPS 5Y9.74%
EPS Q2Q%-72.5%
EPS Next Y-23.21%
EPS Next 2Y-2.44%
EPS Next 3Y4.48%
EPS Next 5Y17.99%
Revenue 1Y (TTM)1.67%
Revenue growth 3Y3.63%
Revenue growth 5Y5.56%
Sales Q2Q%1.37%
Revenue Next Year1.67%
Revenue Next 2Y2.89%
Revenue Next 3Y-37.14%
Revenue Next 5YN/A
EBIT growth 1Y-49.25%
EBIT growth 3Y-14.58%
EBIT growth 5Y1.45%
EBIT Next Year17.25%
EBIT Next 3Y14.39%
EBIT Next 5Y16.07%
FCF growth 1Y-56.68%
FCF growth 3Y4.13%
FCF growth 5Y-13.95%
OCF growth 1Y-48.24%
OCF growth 3Y8.57%
OCF growth 5Y-9.94%