TRINET GROUP INC (TNET)
US8962881079 - Common Stock
Overall TNET gets a fundamental rating of 5 out of 10. We evaluated TNET against 82 industry peers in the Professional Services industry. While TNET belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. TNET has a correct valuation and a medium growth rate.
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 better Return On Assets (8.44%) than 81.48% of its industry peers.
TNET has a Return On Equity of 234.27%. This is amongst the best in the industry. TNET outperforms 98.77% of its industry peers.
TNET has a Return On Invested Capital of 22.25%. This is amongst the best in the industry. TNET outperforms 90.12% of its industry peers.
The Average Return On Invested Capital over the past 3 years for TNET is significantly above the industry average of 11.66%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.44% | ||
| ROE | 234.27% | ||
| ROIC | 22.25% |
ROA(3y)10.23%
ROA(5y)9.47%
ROE(3y)188.31%
ROE(5y)130.88%
ROIC(3y)24.44%
ROIC(5y)22.92%
1.3 Margins
The Profit Margin of TNET (6.78%) is better than 80.25% of its industry peers.
TNET's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 8.54%, TNET is in the better half of the industry, outperforming 65.43% of the companies in the same industry.
In the last couple of years the Operating Margin of TNET has grown nicely.
TNET has a Gross Margin of 21.54%. This is in the lower half of the industry: TNET underperforms 75.31% of its industry peers.
In the last couple of years the Gross Margin of TNET has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 8.54% | ||
| PM (TTM) | 6.78% | ||
| GM | 21.54% |
OM growth 3Y1.46%
OM growth 5Y5.87%
PM growth 3Y4.16%
PM growth 5Y6.81%
GM growth 3Y4.43%
GM growth 5Y3.39%
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 a worse debt to assets ratio.
2.2 Solvency
TNET has an Altman-Z score of 2.17. 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 2.17, TNET is doing worse than 62.96% of the companies in the same industry.
TNET has a debt to FCF ratio of 2.58. This is a good value and a sign of high solvency as TNET would need 2.58 years to pay back of all of its debts.
With a decent Debt to FCF ratio value of 2.58, TNET is doing good in the industry, outperforming 64.20% of the companies in the same industry.
TNET has a Debt/Equity ratio of 7.64. This is a high value indicating a heavy dependency on external financing.
Looking at the Debt to Equity ratio, with a value of 7.64, TNET is doing worse than 96.30% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 7.64 | ||
| Debt/FCF | 2.58 | ||
| Altman-Z | 2.17 |
ROIC/WACC2.74
WACC8.12%
2.3 Liquidity
TNET has a Current Ratio of 1.06. 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 1.06 is on the low side compared to the rest of the industry. TNET is outperformed by 75.31% of its industry peers.
TNET has a Quick Ratio of 1.06. 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 Quick ratio value of 1.06, TNET is not doing good in the industry: 74.07% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.06 | ||
| Quick Ratio | 1.06 |
3. Growth
3.1 Past
TNET shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 6.47%.
Measured over the past years, TNET shows a very strong growth in Earnings Per Share. The EPS has been growing by 20.79% on average per year.
The Revenue has been growing slightly by 0.55% in the past year.
Measured over the past years, TNET shows a small growth in Revenue. The Revenue has been growing by 7.04% on average per year.
EPS 1Y (TTM)6.47%
EPS 3Y20.35%
EPS 5Y20.79%
EPS growth Q2Q-13.25%
Revenue 1Y (TTM)0.55%
Revenue growth 3Y6.86%
Revenue growth 5Y7.04%
Revenue growth Q2Q-71.35%
3.2 Future
Based on estimates for the next years, TNET will show a small growth in Earnings Per Share. The EPS will grow by 1.78% on average per year.
The Revenue is expected to grow by 5.47% on average over the next years.
EPS Next Y-12.4%
EPS Next 2Y-2.65%
EPS Next 3Y1.01%
EPS Next 5Y1.78%
Revenue Next Year2.25%
Revenue Next 2Y4.26%
Revenue Next 3Y5.47%
Revenue Next 5YN/A
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less 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
The Price/Earnings ratio is 13.99, which indicates a correct valuation of TNET.
TNET's Price/Earnings ratio is rather cheap when compared to the industry. TNET is cheaper than 80.25% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 28.83. TNET is valued rather cheaply when compared to this.
A Price/Forward Earnings ratio of 14.13 indicates a correct valuation of TNET.
Compared to the rest of the industry, the Price/Forward Earnings ratio of TNET indicates a somewhat cheap valuation: TNET is cheaper than 70.37% of the companies listed in the same industry.
TNET is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 20.47, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.99 | ||
| Fwd PE | 14.13 |
4.2 Price Multiples
TNET's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. TNET is cheaper than 72.84% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, TNET is valued cheaper than 83.95% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 12.36 | ||
| EV/EBITDA | 11.89 |
4.3 Compensation for Growth
TNET has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)0.67
EPS Next 2Y-2.65%
EPS Next 3Y1.01%
5. Dividend
5.1 Amount
TNET has a yearly dividend return of 0.98%, which is pretty low.
Compared to an average industry Dividend Yield of 2.01, TNET pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.34, TNET's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.98% |
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
DP0%
EPS Next 2Y-2.65%
EPS Next 3Y1.01%
TRINET GROUP INC
NYSE:TNET (5/17/2024, 8:45:00 AM)
103.65
+0.46 (+0.45%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryProfessional Services
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap5.24B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.98% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.99 | ||
| Fwd PE | 14.13 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)N/A
PEG (5Y)0.67
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.44% | ||
| ROE | 234.27% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 8.54% | ||
| PM (TTM) | 6.78% | ||
| GM | 21.54% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover1.24
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 7.64 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.06 | ||
| Quick Ratio | 1.06 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)6.47%
EPS 3Y20.35%
EPS 5Y
EPS growth Q2Q
EPS Next Y-12.4%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)0.55%
Revenue growth 3Y6.86%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y