TRINET GROUP INC (TNET) Stock Fundamental Analysis
NYSE:TNET - US8962881079 - Common Stock
72.42 USD
+1.36 (+1.91%)
61.01 USD
-11.41 (-15.76%)
We assign a fundamental rating of 5 out of 10 to TNET. TNET was compared to 83 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 valued correctly, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
TNET had positive earnings in the past year.
In the past year TNET had a positive cash flow from operations.
Each year in the past 5 years TNET has been profitable.
In the past 5 years TNET always reported a positive cash flow from operatings.
1.2 Ratios
TNET has a Return On Assets of 3.90%. This is comparable to the rest of the industry: TNET outperforms 56.63% of its industry peers.
Looking at the Return On Equity, with a value of 134.58%, TNET belongs to the top of the industry, outperforming 98.80% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 16.69%, TNET belongs to the top of the industry, outperforming 84.34% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for TNET is significantly above the industry average of 12.57%.
The last Return On Invested Capital (16.69%) 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 | 3.9% | ||
| ROE | 134.58% | ||
| ROIC | 16.69% |
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 2.85%, TNET is in line with its industry, outperforming 49.40% of the companies in the same industry.
TNET's Profit Margin has declined in the last couple of years.
Looking at the Operating Margin, with a value of 5.55%, TNET is in line with its industry, outperforming 50.60% of the companies in the same industry.
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 17.62%, TNET is not doing good in the industry: 77.11% 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 | 5.55% | ||
| PM (TTM) | 2.85% | ||
| GM | 17.62% |
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.
The number of shares outstanding for TNET has been reduced compared to 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
An Altman-Z score of 1.92 indicates that TNET is not a great score, but indicates only limited risk for bankruptcy at the moment.
With a Altman-Z score value of 1.92, TNET is not doing good in the industry: 63.86% of the companies in the same industry are doing better.
TNET has a debt to FCF ratio of 1.59. This is a very positive value and a sign of high solvency as it would only need 1.59 years to pay back of all of its debts.
TNET's Debt to FCF ratio of 1.59 is fine compared to the rest of the industry. TNET outperforms 71.08% of its industry peers.
TNET has a Debt/Equity ratio of 9.20. This is a high value indicating a heavy dependency on external financing.
Looking at the Debt to Equity ratio, with a value of 9.20, TNET is doing worse than 89.16% of the companies in the same industry.
Even though the debt/equity ratio score it not favorable for TNET, it has very limited outstanding debt, so we won't put too much weight on the DE evaluation.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 9.2 | ||
| Debt/FCF | 1.59 | ||
| Altman-Z | 1.92 |
ROIC/WACC2.12
WACC7.89%
2.3 Liquidity
A Current Ratio of 1.10 indicates that TNET should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.10, TNET is doing worse than 67.47% of the companies in the same industry.
A Quick Ratio of 1.10 indicates that TNET should not have too much problems paying its short term obligations.
TNET's Quick ratio of 1.10 is on the low side compared to the rest of the industry. TNET is outperformed by 67.47% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.1 | ||
| Quick Ratio | 1.1 |
3. Growth
3.1 Past
The earnings per share for TNET have decreased strongly by -34.03% in the last year.
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 1.76% 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)-34.03%
EPS 3Y-2.17%
EPS 5Y9.74%
EPS Q2Q%-24.84%
Revenue 1Y (TTM)1.76%
Revenue growth 3Y3.63%
Revenue growth 5Y5.56%
Sales Q2Q%0.98%
3.2 Future
Based on estimates for the next years, TNET will show a quite strong growth in Earnings Per Share. The EPS will grow by 17.99% on average per year.
TNET is expected to show a very negative growth in Revenue. In the coming years, the Revenue will decrease by -12.46% yearly.
EPS Next Y-18.16%
EPS Next 2Y-3.12%
EPS Next 3Y2.97%
EPS Next 5Y17.99%
Revenue Next Year0.69%
Revenue Next 2Y1.95%
Revenue Next 3Y-12.46%
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
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 15.25.
74.70% of the companies in the same industry are more expensive than TNET, based on the Price/Earnings ratio.
Compared to an average S&P500 Price/Earnings ratio of 27.13, TNET is valued a bit cheaper.
With a Price/Forward Earnings ratio of 14.56, TNET is valued correctly.
Based on the Price/Forward Earnings ratio, TNET is valued a bit cheaper than 69.88% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.76, TNET is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.25 | ||
| Fwd PE | 14.56 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of TNET indicates a somewhat cheap valuation: TNET is cheaper than 71.08% of the companies listed in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of TNET indicates a rather cheap valuation: TNET is cheaper than 92.77% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 5.7 | ||
| EV/EBITDA | 11.41 |
4.3 Compensation for Growth
The decent profitability rating of TNET may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)1.57
EPS Next 2Y-3.12%
EPS Next 3Y2.97%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.55%, TNET has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 2.17, TNET pays a bit more dividend than its industry peers.
Compared to the average S&P500 Dividend Yield of 2.32, TNET is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.55% |
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
34.72% of the earnings are spent on dividend by TNET. This is a low number and sustainable payout ratio.
DP34.72%
EPS Next 2Y-3.12%
EPS Next 3Y2.97%
72.42
+1.36 (+1.91%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryProfessional Services
Earnings (Last)
Earnings (Next)
Inst Owners96.15%
Inst Owner Change0.9%
Ins Owners0.83%
Ins Owner Change8.81%
Market Cap3.52B
Analysts76.67
Price Target80.58 (11.27%)
Short Float %4.18%
Short Ratio4.3
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.55% |
Yearly Dividend0.74
Dividend Growth(5Y)N/A
DP34.72%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)16.04%
Min EPS beat(2)10.37%
Max EPS beat(2)21.71%
EPS beat(4)3
Avg EPS beat(4)23.55%
Min EPS beat(4)-12.75%
Max EPS beat(4)74.88%
EPS beat(8)6
Avg EPS beat(8)20.43%
EPS beat(12)10
Avg EPS beat(12)39.65%
EPS beat(16)14
Avg EPS beat(16)44.41%
Revenue beat(2)1
Avg Revenue beat(2)-0.42%
Min Revenue beat(2)-1%
Max Revenue beat(2)0.16%
Revenue beat(4)1
Avg Revenue beat(4)-1.07%
Min Revenue beat(4)-2.37%
Max Revenue beat(4)0.16%
Revenue beat(8)1
Avg Revenue beat(8)-1.62%
Revenue beat(12)1
Avg Revenue beat(12)-1.62%
Revenue beat(16)5
Avg Revenue beat(16)79.4%
PT rev (1m)-5.58%
PT rev (3m)-7.42%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-10.77%
EPS NY rev (1m)2.47%
EPS NY rev (3m)2.22%
Revenue NQ rev (1m)0.16%
Revenue NQ rev (3m)-0.4%
Revenue NY rev (1m)0.25%
Revenue NY rev (3m)0.69%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 15.25 | ||
| Fwd PE | 14.56 | ||
| P/S | 0.7 | ||
| P/FCF | 5.7 | ||
| P/OCF | 5.07 | ||
| P/B | 32.89 | ||
| P/tB | N/A | ||
| EV/EBITDA | 11.41 |
EPS(TTM)4.75
EY6.56%
EPS(NY)4.97
Fwd EY6.87%
FCF(TTM)12.7
FCFY17.53%
OCF(TTM)14.28
OCFY19.72%
SpS103.81
BVpS2.2
TBVpS-10.33
PEG (NY)N/A
PEG (5Y)1.57
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.9% | ||
| ROE | 134.58% | ||
| ROCE | 23.73% | ||
| ROIC | 16.69% | ||
| ROICexc | 24.56% | ||
| ROICexgc | 83.45% | ||
| OM | 5.55% | ||
| PM (TTM) | 2.85% | ||
| GM | 17.62% | ||
| FCFM | 12.23% |
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-Score7
Asset Turnover1.37
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 9.2 | ||
| Debt/FCF | 1.59 | ||
| Debt/EBITDA | 2.8 | ||
| Cap/Depr | 108.45% | ||
| Cap/Sales | 1.53% | ||
| Interest Coverage | 5 | ||
| Cash Conversion | 197.72% | ||
| Profit Quality | 428.47% | ||
| Current Ratio | 1.1 | ||
| Quick Ratio | 1.1 | ||
| Altman-Z | 1.92 |
F-Score7
WACC7.89%
ROIC/WACC2.12
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)-34.03%
EPS 3Y-2.17%
EPS 5Y9.74%
EPS Q2Q%-24.84%
EPS Next Y-18.16%
EPS Next 2Y-3.12%
EPS Next 3Y2.97%
EPS Next 5Y17.99%
Revenue 1Y (TTM)1.76%
Revenue growth 3Y3.63%
Revenue growth 5Y5.56%
Sales Q2Q%0.98%
Revenue Next Year0.69%
Revenue Next 2Y1.95%
Revenue Next 3Y-12.46%
Revenue Next 5YN/A
EBIT growth 1Y-30.86%
EBIT growth 3Y-9.98%
EBIT growth 5Y4.69%
EBIT Next Year0.78%
EBIT Next 3Y5.04%
EBIT Next 5Y16.07%
FCF growth 1Y40.23%
FCF growth 3Y4.13%
FCF growth 5Y-13.95%
OCF growth 1Y37.7%
OCF growth 3Y8.57%
OCF growth 5Y-9.94%