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%)
TNET gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 86 industry peers in the Professional Services industry. TNET has only an average score on both its financial health and profitability. TNET has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
In the past year TNET was profitable.
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
Looking at the Return On Assets, with a value of 3.88%, TNET is in line with its industry, outperforming 55.81% of the companies in the same industry.
TNET's Return On Equity of 120.91% is amongst the best of 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 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
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.
TNET's Profit Margin has declined in the last couple of years.
With a Operating Margin value of 5.66%, TNET perfoms like the industry average, outperforming 53.49% 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 17.68%, TNET is not doing good in the industry: 75.58% 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 | 5.66% | ||
| 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
The debt/assets ratio for TNET has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 1.97 indicates that TNET is not a great score, but indicates only limited risk for bankruptcy at the moment.
TNET has a Altman-Z score of 1.97. This is comparable to the rest of the industry: TNET outperforms 40.70% of its industry peers.
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 Debt to FCF ratio of 1.23. This is in the better half of the industry: TNET outperforms 77.91% 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.
TNET has a Debt to Equity ratio of 8.14. This is amonst the worse of the industry: TNET underperforms 86.05% of its industry peers.
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 | 8.14 | ||
| Debt/FCF | 1.23 | ||
| Altman-Z | 1.97 |
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.
The Current ratio of TNET (1.11) is worse than 68.60% of its industry peers.
A Quick Ratio of 1.11 indicates that TNET should not have too much problems paying its short term obligations.
The Quick ratio of TNET (1.11) is worse than 68.60% 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%.
The Earnings Per Share has been growing by 9.74% on average over the past years. This is quite good.
Looking at the last year, TNET shows a small growth in Revenue. The Revenue has grown by 1.35% in the last year.
TNET shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 5.56% yearly.
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
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 small growth in Revenue. In the coming years, the Revenue will grow by 3.08% yearly.
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
The Price/Earnings ratio is 13.32, which indicates a correct valuation of TNET.
TNET's Price/Earnings ratio is rather cheap when compared to the industry. TNET is cheaper than 81.40% of the companies in the same industry.
TNET is valuated cheaply when we compare the Price/Earnings ratio to 27.19, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 12.38, which indicates a correct valuation of TNET.
82.56% of the companies in the same industry are more expensive than TNET, based on the Price/Forward Earnings ratio.
When comparing the Price/Forward Earnings ratio of TNET to the average of the S&P500 Index (23.88), we can say TNET is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.32 | ||
| Fwd PE | 12.38 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, TNET is valued cheaply inside the industry as 81.40% of the companies are valued more expensively.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of TNET indicates a rather cheap valuation: TNET is cheaper than 95.35% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 4.12 | ||
| EV/EBITDA | 10.1 |
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)1.37
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.
TNET's Dividend Yield is rather good when compared to the industry average which is at 1.49. TNET pays more dividend than 81.40% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 1.90, TNET has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.77% |
5.2 History
TNET has paid a dividend for less than 5 years, so there is no long track record yet.
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 | 10.1 |
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 | 1.97 |
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%.