TRINET GROUP INC (TNET) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:TNET - US8962881079 - Common Stock
62.47 USD
+0.42 (+0.68%)
62.47 USD
0 (0%)
Overall TNET gets a fundamental rating of 5 out of 10. We evaluated TNET against 86 industry peers in the Professional Services industry. TNET has an average financial health and profitability rating. TNET is not valued too expensively and it also shows a decent growth rate.
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.
In the past 5 years TNET has always been profitable.
Each year in the past 5 years TNET had a positive operating cash flow.
1.2 Ratios
TNET's Return On Assets of 3.88% is in line compared to the rest of the industry. TNET outperforms 55.81% of its industry peers.
TNET has a Return On Equity of 120.91%. This is amongst the best in the industry. TNET outperforms 98.84% of its industry peers.
TNET has a better Return On Invested Capital (18.35%) than 87.21% 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 11.86%.
The 3 year average ROIC (25.86%) for TNET is well above the current ROIC(18.35%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.88% | ||
| ROE | 120.91% | ||
| ROIC | 18.35% |
ROA(3y)8.22%
ROA(5y)8.76%
ROE(3y)259.1%
ROE(5y)172.1%
ROIC(3y)25.86%
ROIC(5y)24.72%
1.3 Margins
Looking at the Profit Margin, with a value of 2.64%, TNET is in line with its industry, outperforming 51.16% of the companies in the same industry.
In the last couple of years the Profit Margin of TNET has declined.
TNET has a Operating Margin (5.66%) which is comparable to the rest of the industry.
In the last couple of years the Operating Margin of TNET has remained more or less at the same level.
The Gross Margin of TNET (17.68%) is worse than 75.58% of its industry peers.
TNET's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 5.66% | ||
| PM (TTM) | 2.64% | ||
| GM | 17.68% |
OM growth 3Y-13.14%
OM growth 5Y-0.82%
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
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
Compared to 1 year ago, TNET has an improved debt to assets ratio.
2.2 Solvency
TNET has an Altman-Z score of 1.96. 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 (1.96) which is in line with its industry peers.
The Debt to FCF ratio of TNET is 1.23, which is an excellent value as it means it would take TNET, only 1.23 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of TNET (1.23) is better than 79.07% of its industry peers.
A Debt/Equity ratio of 8.14 is on the high side and indicates that TNET has dependencies on debt financing.
With a Debt to Equity ratio value of 8.14, TNET is not doing good in the industry: 86.05% of the companies in the same industry are doing better.
Although TNET does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 8.14 | ||
| Debt/FCF | 1.23 | ||
| Altman-Z | 1.96 |
ROIC/WACC2.35
WACC7.81%
2.3 Liquidity
TNET has a Current Ratio of 1.11. This is a normal value and indicates that TNET is financially healthy and should not expect problems in meeting its short term obligations.
With a Current ratio value of 1.11, TNET is not doing good in the industry: 68.60% of the companies in the same industry are doing better.
TNET has a Quick Ratio of 1.11. This is a normal value and indicates that TNET is financially healthy and should not expect problems in meeting its short term obligations.
TNET has a worse Quick ratio (1.11) than 68.60% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.11 | ||
| Quick Ratio | 1.11 |
3. Growth
3.1 Past
The earnings per share for TNET have decreased strongly by -27.40% in the last year.
The Earnings Per Share has been growing by 9.74% on average over the past years. This is quite good.
The Revenue has been growing slightly by 1.35% in the past year.
The Revenue has been growing slightly by 5.56% on average over the past years.
EPS 1Y (TTM)-27.4%
EPS 3Y-2.17%
EPS 5Y9.74%
EPS Q2Q%-5.13%
Revenue 1Y (TTM)1.35%
Revenue growth 3Y3.63%
Revenue growth 5Y5.56%
Sales Q2Q%-0.4%
3.2 Future
The Earnings Per Share is expected to grow by 17.99% on average over the next years. This is quite good.
Based on estimates for the next years, TNET will show a small growth in Revenue. The Revenue will grow by 3.08% on average per year.
EPS Next Y-9.84%
EPS Next 2Y-2.41%
EPS Next 3Y2.4%
EPS Next 5Y17.99%
Revenue Next Year1.06%
Revenue Next 2Y1.76%
Revenue Next 3Y3.08%
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
With a Price/Earnings ratio of 13.32, TNET is valued correctly.
Compared to the rest of the industry, the Price/Earnings ratio of TNET indicates a rather cheap valuation: TNET is cheaper than 80.23% of the companies listed in the same industry.
TNET's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 27.19.
A Price/Forward Earnings ratio of 12.38 indicates a correct valuation of TNET.
Based on the Price/Forward Earnings ratio, TNET is valued cheaply inside the industry as 81.40% of the companies are valued more expensively.
TNET's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 23.88.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.32 | ||
| Fwd PE | 12.38 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of TNET indicates a rather cheap valuation: TNET is cheaper than 81.40% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, TNET is valued cheaper than 95.35% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 4.12 | ||
| EV/EBITDA | 10.04 |
4.3 Compensation for Growth
The decent profitability rating of TNET may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.37
EPS Next 2Y-2.41%
EPS Next 3Y2.4%
5. Dividend
5.1 Amount
TNET has a Yearly Dividend Yield of 1.77%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 1.49, TNET pays a better dividend. On top of this TNET pays more dividend than 81.40% of the companies listed in the same industry.
TNET's Dividend Yield is comparable with the S&P500 average which is at 1.90.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.77% |
5.2 History
TNET has been paying a dividend for less than 5 years, so it still needs to build a track record.
Dividend Growth(5Y)N/A
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
38.35% of the earnings are spent on dividend by TNET. This is a low number and sustainable payout ratio.
DP38.35%
EPS Next 2Y-2.41%
EPS Next 3Y2.4%
62.47
+0.42 (+0.68%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryProfessional Services
Earnings (Last)
Earnings (Next)
Inst Owners97.02%
Inst Owner Change0%
Ins Owners0.97%
Ins Owner Change3.09%
Market Cap3.00B
Revenue(TTM)5.04B
Net Income(TTM)133.00M
Analysts75.38
Price Target71.81 (14.95%)
Short Float %5.21%
Short Ratio6.04
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.77% |
Yearly Dividend0.74
Dividend Growth(5Y)N/A
DP38.35%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)25.06%
Min EPS beat(2)10.37%
Max EPS beat(2)39.76%
EPS beat(4)4
Avg EPS beat(4)36.68%
Min EPS beat(4)10.37%
Max EPS beat(4)74.88%
EPS beat(8)6
Avg EPS beat(8)21.08%
EPS beat(12)10
Avg EPS beat(12)38.17%
EPS beat(16)14
Avg EPS beat(16)42.97%
Revenue beat(2)0
Avg Revenue beat(2)-0.76%
Min Revenue beat(2)-0.96%
Max Revenue beat(2)-0.56%
Revenue beat(4)0
Avg Revenue beat(4)-0.91%
Min Revenue beat(4)-1.1%
Max Revenue beat(4)-0.56%
Revenue beat(8)0
Avg Revenue beat(8)-1.44%
Revenue beat(12)0
Avg Revenue beat(12)-1.63%
Revenue beat(16)3
Avg Revenue beat(16)56.99%
PT rev (1m)-2.9%
PT rev (3m)-10.89%
EPS NQ rev (1m)-2.44%
EPS NQ rev (3m)19.58%
EPS NY rev (1m)-0.36%
EPS NY rev (3m)10.17%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.47%
Revenue NY rev (1m)0.02%
Revenue NY rev (3m)0.37%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.32 | ||
| Fwd PE | 12.38 | ||
| P/S | 0.6 | ||
| P/FCF | 4.12 | ||
| P/OCF | 3.76 | ||
| P/B | 27.28 | ||
| P/tB | N/A | ||
| EV/EBITDA | 10.04 |
EPS(TTM)4.69
EY7.51%
EPS(NY)5.05
Fwd EY8.08%
FCF(TTM)15.18
FCFY24.3%
OCF(TTM)16.61
OCFY26.6%
SpS104.91
BVpS2.29
TBVpS-10.45
PEG (NY)N/A
PEG (5Y)1.37
Graham Number15.55
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.88% | ||
| ROE | 120.91% | ||
| ROCE | 24.23% | ||
| ROIC | 18.35% | ||
| ROICexc | 25.23% | ||
| ROICexgc | 88.78% | ||
| OM | 5.66% | ||
| PM (TTM) | 2.64% | ||
| GM | 17.68% | ||
| FCFM | 14.47% |
ROA(3y)8.22%
ROA(5y)8.76%
ROE(3y)259.1%
ROE(5y)172.1%
ROIC(3y)25.86%
ROIC(5y)24.72%
ROICexc(3y)36.08%
ROICexc(5y)36.99%
ROICexgc(3y)106.18%
ROICexgc(5y)88.16%
ROCE(3y)35.96%
ROCE(5y)33.74%
ROICexgc growth 3Y17.36%
ROICexgc growth 5Y22.61%
ROICexc growth 3Y-11.05%
ROICexc growth 5Y3.97%
OM growth 3Y-13.14%
OM growth 5Y-0.82%
PM growth 3Y-22.81%
PM growth 5Y-9.04%
GM growth 3Y-2.99%
GM growth 5Y1.21%
F-Score7
Asset Turnover1.47
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 8.14 | ||
| Debt/FCF | 1.23 | ||
| Debt/EBITDA | 2.53 | ||
| Cap/Depr | 100% | ||
| Cap/Sales | 1.37% | ||
| Interest Coverage | 5.18 | ||
| Cash Conversion | 225.42% | ||
| Profit Quality | 548.12% | ||
| Current Ratio | 1.11 | ||
| Quick Ratio | 1.11 | ||
| Altman-Z | 1.96 |
F-Score7
WACC7.81%
ROIC/WACC2.35
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)-27.4%
EPS 3Y-2.17%
EPS 5Y9.74%
EPS Q2Q%-5.13%
EPS Next Y-9.84%
EPS Next 2Y-2.41%
EPS Next 3Y2.4%
EPS Next 5Y17.99%
Revenue 1Y (TTM)1.35%
Revenue growth 3Y3.63%
Revenue growth 5Y5.56%
Sales Q2Q%-0.4%
Revenue Next Year1.06%
Revenue Next 2Y1.76%
Revenue Next 3Y3.08%
Revenue Next 5YN/A
EBIT growth 1Y-17.87%
EBIT growth 3Y-9.98%
EBIT growth 5Y4.69%
EBIT Next Year6.47%
EBIT Next 3Y6.7%
EBIT Next 5Y16.07%
FCF growth 1Y95.97%
FCF growth 3Y4.13%
FCF growth 5Y-13.95%
OCF growth 1Y80.14%
OCF growth 3Y8.57%
OCF growth 5Y-9.94%
TRINET GROUP INC / TNET FAQ
What is the fundamental rating for TNET stock?
ChartMill assigns a fundamental rating of 5 / 10 to TNET.
What is the valuation status for TNET stock?
ChartMill assigns a valuation rating of 6 / 10 to TRINET GROUP INC (TNET). This can be considered as Fairly Valued.
What is the profitability of TNET stock?
TRINET GROUP INC (TNET) has a profitability rating of 6 / 10.
How financially healthy is TRINET GROUP INC?
The financial health rating of TRINET GROUP INC (TNET) is 6 / 10.
Can you provide the dividend sustainability for TNET stock?
The dividend rating of TRINET GROUP INC (TNET) is 4 / 10 and the dividend payout ratio is 38.35%.