TRINET GROUP INC (TNET) Stock Fundamental Analysis
NYSE:TNET - New York Stock Exchange, Inc. - US8962881079 - Common Stock - Currency: USD
TNET gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 82 industry peers in the Professional Services industry. TNET has only an average score on both its financial health and profitability. TNET has a valuation in line with the averages, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
In the past year TNET was profitable.
TNET had a positive operating cash flow in the past year.
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
Looking at the Return On Assets, with a value of 4.20%, TNET is in line with its industry, outperforming 56.10% of the companies in the same industry.
The Return On Equity of TNET (250.72%) is better than 97.56% of its industry peers.
TNET has a better Return On Invested Capital (17.91%) than 84.15% of its industry peers.
The Average Return On Invested Capital over the past 3 years for TNET is significantly above the industry average of 13.38%.
The 3 year average ROIC (25.86%) for TNET is well above the current ROIC(17.91%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.2% | ||
| ROE | 250.72% | ||
| ROIC | 17.91% |
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
TNET has a Profit Margin (3.46%) which is comparable to the rest of the industry.
TNET's Profit Margin has declined in the last couple of years.
The Operating Margin of TNET (5.74%) 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.
TNET has a Gross Margin of 18.05%. This is in the lower half of the industry: TNET underperforms 76.83% of its industry peers.
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 | 5.74% | ||
| PM (TTM) | 3.46% | ||
| GM | 18.05% |
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
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.
The number of shares outstanding for TNET has been reduced compared to 5 years ago.
Compared to 1 year ago, TNET has an improved debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 1.73, we must say that TNET is in the distress zone and has some risk of bankruptcy.
TNET has a Altman-Z score of 1.73. This is in the lower half of the industry: TNET underperforms 63.41% of its industry peers.
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.
Looking at the Debt to FCF ratio, with a value of 4.89, TNET is in line with its industry, outperforming 56.10% of the companies in the same industry.
A Debt/Equity ratio of 14.25 is on the high side and indicates that TNET has dependencies on debt financing.
With a Debt to Equity ratio value of 14.25, TNET is not doing good in the industry: 90.24% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 14.25 | ||
| Debt/FCF | 4.89 | ||
| Altman-Z | 1.73 |
ROIC/WACC2.19
WACC8.17%
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.
With a Current ratio value of 1.07, TNET is not doing good in the industry: 68.29% of the companies in the same industry are doing better.
A Quick Ratio of 1.07 indicates that TNET should not have too much problems paying its short term obligations.
Looking at the Quick ratio, with a value of 1.07, TNET is doing worse than 68.29% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.07 | ||
| Quick Ratio | 1.07 |
3. Growth
3.1 Past
TNET shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -30.77%.
Measured over the past years, TNET shows a quite strong growth in Earnings Per Share. The EPS has been growing by 9.74% on average per year.
TNET shows a small growth in Revenue. In the last year, the Revenue has grown by 1.18%.
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)-30.77%
EPS 3Y-2.17%
EPS 5Y9.74%
EPS Q2Q%-7.87%
Revenue 1Y (TTM)1.18%
Revenue growth 3Y3.63%
Revenue growth 5Y5.56%
Sales Q2Q%-72.31%
3.2 Future
TNET is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 17.99% yearly.
The Revenue is expected to decrease by -37.14% on average over the next years. This is quite bad
EPS Next Y-23.11%
EPS Next 2Y-3.54%
EPS Next 3Y3.73%
EPS Next 5Y17.99%
Revenue Next Year0.32%
Revenue Next 2Y1.8%
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.
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
TNET is valuated correctly with a Price/Earnings ratio of 15.79.
TNET's Price/Earnings ratio is a bit cheaper when compared to the industry. TNET is cheaper than 64.63% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 27.75. TNET is valued slightly cheaper when compared to this.
Based on the Price/Forward Earnings ratio of 16.42, the valuation of TNET can be described as correct.
TNET's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. TNET is cheaper than 62.20% of the companies in the same industry.
TNET's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 20.49.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.79 | ||
| Fwd PE | 16.42 |
4.2 Price Multiples
TNET's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. TNET is cheaper than 63.41% of the companies in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of TNET indicates a somewhat cheap valuation: TNET is cheaper than 67.07% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.5 | ||
| EV/EBITDA | 12.05 |
4.3 Compensation for Growth
The decent profitability rating of TNET may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.62
EPS Next 2Y-3.54%
EPS Next 3Y3.73%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.40%, TNET has a reasonable but not impressive dividend return.
TNET's Dividend Yield is a higher than the industry average which is at 2.40.
Compared to an average S&P500 Dividend Yield of 2.44, TNET's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.4% |
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
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-3.54%
EPS Next 3Y3.73%
NYSE:TNET (5/2/2025, 12:24:09 PM)
80.99
+2.22 (+2.82%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryProfessional Services
Earnings (Last)
Earnings (Next)
Inst Owners98.53%
Inst Owner Change-0.06%
Ins Owners0.72%
Ins Owner Change7.28%
Market Cap3.92B
Analysts76.67
Price Target86.36 (6.63%)
Short Float %2.48%
Short Ratio2.02
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.4% |
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)-0.78%
PT rev (3m)-12.26%
EPS NQ rev (1m)-0.54%
EPS NQ rev (3m)-19.46%
EPS NY rev (1m)-0.41%
EPS NY rev (3m)-28.32%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-2.96%
Revenue NY rev (1m)0.02%
Revenue NY rev (3m)-4.5%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.79 | ||
| Fwd PE | 16.42 | ||
| P/S | 0.78 | ||
| P/FCF | 19.5 | ||
| P/OCF | 14.05 | ||
| P/B | 56.81 | ||
| P/tB | N/A | ||
| EV/EBITDA | 12.05 |
EPS(TTM)5.13
EY6.33%
EPS(NY)4.93
Fwd EY6.09%
FCF(TTM)4.15
FCFY5.13%
OCF(TTM)5.76
OCFY7.12%
SpS103.39
BVpS1.43
TBVpS-11.32
PEG (NY)N/A
PEG (5Y)1.62
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.2% | ||
| ROE | 250.72% | ||
| ROCE | 25.22% | ||
| ROIC | 17.91% | ||
| ROICexc | 25.47% | ||
| ROICexgc | 92.06% | ||
| OM | 5.74% | ||
| 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)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%
ROICexcg growth 3Y17.36%
ROICexcg 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-Score6
Asset Turnover1.21
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 14.25 | ||
| Debt/FCF | 4.89 | ||
| Debt/EBITDA | 2.72 | ||
| Cap/Depr | 104% | ||
| Cap/Sales | 1.56% | ||
| Interest Coverage | 4.86 | ||
| Cash Conversion | 77.07% | ||
| Profit Quality | 116.19% | ||
| Current Ratio | 1.07 | ||
| Quick Ratio | 1.07 | ||
| Altman-Z | 1.73 |
F-Score6
WACC8.17%
ROIC/WACC2.19
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)-30.77%
EPS 3Y-2.17%
EPS 5Y9.74%
EPS Q2Q%-7.87%
EPS Next Y-23.11%
EPS Next 2Y-3.54%
EPS Next 3Y3.73%
EPS Next 5Y17.99%
Revenue 1Y (TTM)1.18%
Revenue growth 3Y3.63%
Revenue growth 5Y5.56%
Sales Q2Q%-72.31%
Revenue Next Year0.32%
Revenue Next 2Y1.8%
Revenue Next 3Y-37.14%
Revenue Next 5YN/A
EBIT growth 1Y-38.81%
EBIT growth 3Y-9.98%
EBIT growth 5Y4.69%
EBIT Next Year2.18%
EBIT Next 3Y6.98%
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%