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 5 out of 10. We evaluated TNET against 82 industry peers in the Professional Services industry. While TNET belongs to the best of the industry regarding profitability, there are 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.
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
The Return On Assets of TNET (7.05%) is better than 70.89% of its industry peers.
TNET's Return On Equity of 203.88% is amongst the best of the industry. TNET outperforms 98.73% of its industry peers.
TNET has a Return On Invested Capital of 18.89%. This is amongst the best in the industry. TNET outperforms 83.54% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for TNET is significantly above the industry average of 13.46%.
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
TNET's Profit Margin of 5.29% is fine compared to the rest of the industry. TNET outperforms 63.29% of its industry peers.
TNET's Profit Margin has improved in the last couple of years.
The Operating Margin of TNET (6.98%) is comparable to the rest of the industry.
TNET's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 19.65%, TNET is doing worse than 81.01% of the companies in the same industry.
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
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), TNET is creating value.
Compared to 1 year ago, TNET has less shares outstanding
The number of shares outstanding for TNET has been reduced compared to 5 years ago.
TNET has a worse debt/assets ratio than last year.
2.2 Solvency
TNET has an Altman-Z score of 2.13. 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's Altman-Z score of 2.13 is on the low side compared to the rest of the industry. TNET is outperformed by 64.56% 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 (4.62) which is comparable to the rest of the industry.
TNET has a Debt/Equity ratio of 8.28. This is a high value indicating a heavy dependency on external financing.
TNET has a Debt to Equity ratio of 8.28. This is amonst the worse of the industry: TNET underperforms 92.41% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 8.28 | ||
| Debt/FCF | 4.62 | ||
| Altman-Z | 2.13 |
ROIC/WACC2.12
WACC8.89%
2.3 Liquidity
A Current Ratio of 1.07 indicates that TNET should not have too much problems paying its short term obligations.
TNET has a Current ratio of 1.07. This is in the lower half of the industry: TNET underperforms 69.62% 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.
TNET's Quick ratio of 1.07 is on the low side compared to the rest of the industry. TNET is outperformed by 68.35% 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.
TNET shows a small growth in Revenue. In the last year, the Revenue has grown by 1.41%.
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
TNET is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 1.78% yearly.
Based on estimates for the next years, TNET will show a small growth in Revenue. The Revenue will grow by 4.41% on average per year.
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 2Y3.1%
Revenue Next 3Y4.41%
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 decreasing.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 14.64, the valuation of TNET can be described as correct.
TNET's Price/Earnings ratio is a bit cheaper when compared to the industry. TNET is cheaper than 78.48% of the companies in the same industry.
TNET is valuated rather cheaply when we compare the Price/Earnings ratio to 28.28, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 16.63 indicates a correct valuation of TNET.
Compared to the rest of the industry, the Price/Forward Earnings ratio of TNET indicates a somewhat cheap valuation: TNET is cheaper than 64.56% of the companies listed in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 91.29. TNET is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.64 | ||
| Fwd PE | 16.63 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, TNET is valued a bit cheaper than the industry average as 67.09% of the companies are valued more expensively.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of TNET indicates a somewhat cheap valuation: TNET is cheaper than 70.89% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 20.3 | ||
| EV/EBITDA | 12.64 |
4.3 Compensation for Growth
TNET has an outstanding profitability rating, which may justify a higher PE ratio.
A cheap valuation may be justified as TNET's earnings are expected to decrease with -4.68% in the coming years.
PEG (NY)N/A
PEG (5Y)0.7
EPS Next 2Y-14.3%
EPS Next 3Y-4.68%
5. Dividend
5.1 Amount
TNET has a Yearly Dividend Yield of 1.06%. Purely for dividend investing, there may be better candidates out there.
TNET's Dividend Yield is a higher than the industry average which is at 1.81.
With a Dividend Yield of 1.06, TNET pays less dividend than the S&P500 average, which is at 2.27.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.06% |
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
DPN/A
EPS Next 2Y-14.3%
EPS Next 3Y-4.68%
TRINET GROUP INC
NYSE:TNET (1/29/2025, 8:04:00 PM)
After market: 94.56 0 (0%)94.56
-0.1 (-0.11%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryProfessional Services
Earnings (Last)
Earnings (Next)
Inst Owners92.76%
Inst Owner Change0.05%
Ins Owners1.54%
Ins Owner Change-1.97%
Market Cap4.69B
Analysts78.33
Price Target98.43 (4.09%)
Short Float %3.59%
Short Ratio4.97
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.06% |
Yearly Dividend0
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)0%
PT rev (3m)-18.91%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-80.93%
EPS NY rev (1m)0%
EPS NY rev (3m)-15.28%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-1.62%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-1.01%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 14.64 | ||
| Fwd PE | 16.63 | ||
| P/S | 0.94 | ||
| P/FCF | 20.3 | ||
| P/OCF | 15.03 | ||
| P/B | 36.34 | ||
| P/tB | N/A | ||
| EV/EBITDA | 12.64 |
EPS(TTM)6.46
EY6.83%
EPS(NY)5.68
Fwd EY6.01%
FCF(TTM)4.66
FCFY4.93%
OCF(TTM)6.29
OCFY6.65%
SpS100.28
BVpS2.6
TBVpS-10.33
PEG (NY)N/A
PEG (5Y)0.7
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 | 2.13 |
F-Score5
WACC8.89%
ROIC/WACC2.12
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 2Y3.1%
Revenue Next 3Y4.41%
Revenue Next 5YN/A
EBIT growth 1Y-20.78%
EBIT growth 3Y8.42%
EBIT growth 5Y13.32%
EBIT Next Year0.4%
EBIT Next 3Y4.74%
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