TRINET GROUP INC (TNET) Stock Fundamental Analysis
USA - NYSE:TNET - US8962881079 - Common Stock
58.61 USD
-4.14 (-6.6%)
58.61 USD
0 (0%)
Taking everything into account, TNET scores 5 out of 10 in our fundamental rating. TNET was compared to 86 industry peers in the Professional Services industry. TNET has only an average score on both its financial health and profitability. 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.
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
With a Return On Assets value of 3.90%, TNET perfoms like the industry average, outperforming 56.98% of the companies in the same industry.
Looking at the Return On Equity, with a value of 134.58%, TNET belongs to the top of the industry, outperforming 98.84% 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 84.88% 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 13.22%.
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
The Profit Margin of TNET (2.85%) is comparable to the rest of the industry.
In the last couple of years the Profit Margin of TNET has declined.
The Operating Margin of TNET (5.55%) 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.
With a Gross Margin value of 17.62%, TNET is not doing good in the industry: 76.74% 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.
Compared to 1 year ago, TNET has less shares outstanding
Compared to 5 years ago, TNET has less shares outstanding
TNET has a better debt/assets ratio than last year.
2.2 Solvency
TNET has an Altman-Z score of 1.84. 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.
TNET's Altman-Z score of 1.84 is on the low side compared to the rest of the industry. TNET is outperformed by 61.63% of its industry peers.
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.
With a decent Debt to FCF ratio value of 1.59, TNET is doing good in the industry, outperforming 72.09% of the companies in the same industry.
A Debt/Equity ratio of 9.20 is on the high side and indicates that TNET has dependencies on debt financing.
With a Debt to Equity ratio value of 9.20, TNET is not doing good in the industry: 86.05% of the companies in the same industry are doing better.
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 | 1.84 |
ROIC/WACC2.23
WACC7.47%
2.3 Liquidity
TNET has a Current Ratio of 1.10. This is a normal value and indicates that TNET is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 1.10, TNET is doing worse than 67.44% 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 has a worse Quick ratio (1.10) than 67.44% 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.
TNET shows a small growth in Revenue. In the last year, the Revenue has grown by 1.76%.
TNET shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 5.56% yearly.
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
The Earnings Per Share is expected to grow by 17.99% on average over the next years. This is quite good.
Based on estimates for the next years, TNET will show a very negative growth in Revenue. The Revenue will decrease by -12.25% on average per year.
EPS Next Y-18%
EPS Next 2Y-3.15%
EPS Next 3Y2.75%
EPS Next 5Y17.99%
Revenue Next Year0.77%
Revenue Next 2Y1.91%
Revenue Next 3Y-12.25%
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
The Price/Earnings ratio is 12.34, which indicates a correct valuation of TNET.
Based on the Price/Earnings ratio, TNET is valued cheaply inside the industry as 81.40% of the companies are valued more expensively.
TNET is valuated cheaply when we compare the Price/Earnings ratio to 26.76, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 11.79 indicates a reasonable 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 72.09% of the companies listed in the same industry.
TNET's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 22.63.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.34 | ||
| Fwd PE | 11.79 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, TNET is valued a bit cheaper than 76.74% of the companies 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 94.19% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 4.62 | ||
| EV/EBITDA | 10.07 |
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)1.27
EPS Next 2Y-3.15%
EPS Next 3Y2.75%
5. Dividend
5.1 Amount
TNET has a Yearly Dividend Yield of 1.75%.
TNET's Dividend Yield is rather good when compared to the industry average which is at 3.93. TNET pays more dividend than 82.56% of the companies in the same industry.
Compared to the average S&P500 Dividend Yield of 2.31, TNET is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.75% |
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
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-3.15%
EPS Next 3Y2.75%
58.61
-4.14 (-6.6%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryProfessional Services
Earnings (Last)
Earnings (Next)
Inst Owners96.59%
Inst Owner Change0.16%
Ins Owners0.81%
Ins Owner Change-0.26%
Market Cap2.85B
Revenue(TTM)5.04B
Net Income(TTM)144.00M
Analysts76.67
Price Target80.58 (37.49%)
Short Float %4.99%
Short Ratio6.4
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.75% |
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)0
Avg Revenue beat(2)-0.78%
Min Revenue beat(2)-1%
Max Revenue beat(2)-0.56%
Revenue beat(4)0
Avg Revenue beat(4)-1.26%
Min Revenue beat(4)-2.37%
Max Revenue beat(4)-0.56%
Revenue beat(8)0
Avg Revenue beat(8)-1.71%
Revenue beat(12)0
Avg Revenue beat(12)-1.68%
Revenue beat(16)4
Avg Revenue beat(16)79.35%
PT rev (1m)0%
PT rev (3m)-5.58%
EPS NQ rev (1m)1.08%
EPS NQ rev (3m)3.27%
EPS NY rev (1m)0.2%
EPS NY rev (3m)2.67%
Revenue NQ rev (1m)0.08%
Revenue NQ rev (3m)0.4%
Revenue NY rev (1m)0.08%
Revenue NY rev (3m)0.63%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.34 | ||
| Fwd PE | 11.79 | ||
| P/S | 0.56 | ||
| P/FCF | 4.62 | ||
| P/OCF | 4.1 | ||
| P/B | 26.62 | ||
| P/tB | N/A | ||
| EV/EBITDA | 10.07 |
EPS(TTM)4.75
EY8.1%
EPS(NY)4.97
Fwd EY8.48%
FCF(TTM)12.7
FCFY21.67%
OCF(TTM)14.28
OCFY24.37%
SpS103.81
BVpS2.2
TBVpS-10.33
PEG (NY)N/A
PEG (5Y)1.27
Graham Number15.34
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%
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 Turnover1.37
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 | 1.84 |
F-Score7
WACC7.47%
ROIC/WACC2.23
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%
EPS Next 2Y-3.15%
EPS Next 3Y2.75%
EPS Next 5Y17.99%
Revenue 1Y (TTM)1.76%
Revenue growth 3Y3.63%
Revenue growth 5Y5.56%
Sales Q2Q%0.98%
Revenue Next Year0.77%
Revenue Next 2Y1.91%
Revenue Next 3Y-12.25%
Revenue Next 5YN/A
EBIT growth 1Y-30.86%
EBIT growth 3Y-9.98%
EBIT growth 5Y4.69%
EBIT Next Year0.45%
EBIT Next 3Y5.48%
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%
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 -18% 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 34.72%.