TRINET GROUP INC (TNET) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:TNET - US8962881079 - Common Stock
61.51 USD
+0.82 (+1.35%)
61.51 USD
0 (0%)
TNET gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 87 industry peers in the Professional Services industry. Both the profitability and the financial health of TNET get a neutral evaluation. Nothing too spectacular is happening here. TNET is not valued too expensively and it also shows a decent growth rate.
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.
TNET had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
The Return On Assets of TNET (3.88%) is comparable to the rest of the industry.
The Return On Equity of TNET (120.91%) is better than 98.85% of its industry peers.
Looking at the Return On Invested Capital, with a value of 18.35%, TNET belongs to the top of the industry, outperforming 86.21% 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 11.98%.
The last Return On Invested Capital (18.35%) for TNET is well below the 3 year average (25.86%), which needs to be investigated, but indicates that TNET had better years and this may not be a problem.
| 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
TNET's Profit Margin of 2.64% is in line compared to the rest of the industry. TNET outperforms 50.57% of its industry peers.
TNET's Profit Margin has declined in the last couple of years.
TNET's Operating Margin of 5.66% is in line compared to the rest of the industry. TNET outperforms 52.87% of its industry peers.
In the last couple of years the Operating Margin of TNET has remained more or less at the same level.
With a Gross Margin value of 17.68%, TNET is not doing good in the industry: 77.01% of the companies in the same industry are doing better.
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
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), TNET 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.
TNET has a better debt/assets ratio than last year.
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.
Looking at the Altman-Z score, with a value of 1.96, TNET is in line with its industry, outperforming 41.38% of the companies in the same industry.
TNET has a debt to FCF ratio of 1.23. This is a very positive value and a sign of high solvency as it would only need 1.23 years to pay back of all of its debts.
TNET has a better Debt to FCF ratio (1.23) than 78.16% 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.
The Debt to Equity ratio of TNET (8.14) is worse than 86.21% of its industry peers.
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/WACC2.39
WACC7.68%
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.
TNET's Current ratio of 1.11 is on the low side compared to the rest of the industry. TNET is outperformed by 68.97% of its industry peers.
A Quick Ratio of 1.11 indicates that TNET should not have too much problems paying its short term obligations.
TNET has a worse Quick ratio (1.11) than 68.97% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.11 | ||
| Quick Ratio | 1.11 |
3. Growth
3.1 Past
TNET shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -27.40%.
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.
Looking at the last year, TNET shows a small growth in Revenue. The Revenue has grown by 1.35% 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)-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.
TNET is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.17% yearly.
EPS Next Y-9.51%
EPS Next 2Y-2.25%
EPS Next 3Y2.56%
EPS Next 5Y17.99%
Revenue Next Year1.04%
Revenue Next 2Y1.85%
Revenue Next 3Y3.17%
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
TNET is valuated correctly with a Price/Earnings ratio of 13.12.
Based on the Price/Earnings ratio, TNET is valued a bit cheaper than the industry average as 79.31% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 26.22. TNET is valued slightly cheaper when compared to this.
TNET is valuated correctly with a Price/Forward Earnings ratio of 12.15.
Based on the Price/Forward Earnings ratio, TNET is valued a bit cheaper than 77.01% of the companies in the same industry.
TNET's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 23.58.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.12 | ||
| Fwd PE | 12.15 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, TNET is valued a bit cheaper than the industry average as 79.31% of the companies are valued more expensively.
TNET's Price/Free Cash Flow ratio is rather cheap when compared to the industry. TNET is cheaper than 96.55% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 4.05 | ||
| EV/EBITDA | 9.97 |
4.3 Compensation for Growth
TNET has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.35
EPS Next 2Y-2.25%
EPS Next 3Y2.56%
5. Dividend
5.1 Amount
TNET has a Yearly Dividend Yield of 1.89%.
Compared to an average industry Dividend Yield of 1.55, TNET pays a better dividend. On top of this TNET pays more dividend than 81.61% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 1.87, TNET has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.89% |
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
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-2.25%
EPS Next 3Y2.56%
61.51
+0.82 (+1.35%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryProfessional Services
Earnings (Last)
Earnings (Next)
Inst Owners96.91%
Inst Owner Change-0.97%
Ins Owners0.81%
Ins Owner Change-1.31%
Market Cap2.95B
Revenue(TTM)5.04B
Net Income(TTM)133.00M
Analysts76.67
Price Target73.95 (20.22%)
Short Float %5.42%
Short Ratio6.48
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.89% |
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)-6.65%
PT rev (3m)-8.23%
EPS NQ rev (1m)0.12%
EPS NQ rev (3m)22.57%
EPS NY rev (1m)4.67%
EPS NY rev (3m)10.57%
Revenue NQ rev (1m)0.08%
Revenue NQ rev (3m)0.47%
Revenue NY rev (1m)0.33%
Revenue NY rev (3m)0.35%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.12 | ||
| Fwd PE | 12.15 | ||
| P/S | 0.59 | ||
| P/FCF | 4.05 | ||
| P/OCF | 3.7 | ||
| P/B | 26.86 | ||
| P/tB | N/A | ||
| EV/EBITDA | 9.97 |
EPS(TTM)4.69
EY7.62%
EPS(NY)5.06
Fwd EY8.23%
FCF(TTM)15.18
FCFY24.68%
OCF(TTM)16.61
OCFY27.01%
SpS104.91
BVpS2.29
TBVpS-10.45
PEG (NY)N/A
PEG (5Y)1.35
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
WACC7.68%
ROIC/WACC2.39
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-9.51%
EPS Next 2Y-2.25%
EPS Next 3Y2.56%
EPS Next 5Y17.99%
Revenue 1Y (TTM)1.35%
Revenue growth 3Y3.63%
Revenue growth 5Y5.56%
Sales Q2Q%-0.4%
Revenue Next Year1.04%
Revenue Next 2Y1.85%
Revenue Next 3Y3.17%
Revenue Next 5YN/A
EBIT growth 1Y-17.87%
EBIT growth 3Y-9.98%
EBIT growth 5Y4.69%
EBIT Next Year6.03%
EBIT Next 3Y6.49%
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.
Can you provide the valuation status for TRINET GROUP INC?
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.
Can you provide the expected EPS growth for TNET stock?
The Earnings per Share (EPS) of TRINET GROUP INC (TNET) is expected to decline by -9.51% in the next year.
How sustainable is the dividend of TRINET GROUP INC (TNET) stock?
The dividend rating of TRINET GROUP INC (TNET) is 3 / 10 and the dividend payout ratio is 38.35%.