TRINET GROUP INC (TNET) Stock Fundamental Analysis
NYSE:TNET - New York Stock Exchange, Inc. - US8962881079 - Common Stock - Currency: USD
Taking everything into account, TNET scores 5 out of 10 in our fundamental rating. TNET was compared to 82 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 has a valuation in line with the averages, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
In the past year TNET was profitable.
In the past year TNET had a positive cash flow from operations.
In the past 5 years TNET has always been profitable.
Each year in the past 5 years TNET had a positive operating cash flow.
1.2 Ratios
With a Return On Assets value of 4.42%, TNET perfoms like the industry average, outperforming 57.32% of the companies in the same industry.
TNET has a better Return On Equity (265.08%) than 97.56% of its industry peers.
The Return On Invested Capital of TNET (18.50%) is better than 89.02% of its industry peers.
The Average Return On Invested Capital over the past 3 years for TNET is significantly above the industry average of 12.27%.
The last Return On Invested Capital (18.50%) 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 | 4.42% | ||
| ROE | 265.08% | ||
| ROIC | 18.5% |
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 3.32%, TNET is in line with its industry, outperforming 51.22% of the companies in the same industry.
TNET's Profit Margin has declined in the last couple of years.
TNET has a Operating Margin (5.84%) which is in line with 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 17.96%, TNET is not doing good in the industry: 75.61% 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 | 5.84% | ||
| PM (TTM) | 3.32% | ||
| GM | 17.97% |
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%
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
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.
With a Altman-Z score value of 1.84, TNET is not doing good in the industry: 64.63% of the companies in the same industry are doing better.
TNET has a debt to FCF ratio of 2.34. This is a good value and a sign of high solvency as TNET would need 2.34 years to pay back of all of its debts.
With a decent Debt to FCF ratio value of 2.34, TNET is doing good in the industry, outperforming 69.51% of the companies in the same industry.
TNET has a Debt/Equity ratio of 15.60. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of TNET (15.60) is worse than 90.24% 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 | 15.6 | ||
| Debt/FCF | 2.34 | ||
| Altman-Z | 1.84 |
ROIC/WACC2.16
WACC8.56%
2.3 Liquidity
TNET has a Current Ratio of 1.08. This is a normal value and indicates that TNET is financially healthy and should not expect problems in meeting its short term obligations.
TNET has a Current ratio of 1.08. This is in the lower half of the industry: TNET underperforms 69.51% of its industry peers.
TNET has a Quick Ratio of 1.08. This is a normal value and indicates that TNET is financially healthy and should not expect problems in meeting its short term obligations.
TNET has a worse Quick ratio (1.08) than 69.51% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.08 | ||
| Quick Ratio | 1.08 |
3. Growth
3.1 Past
The earnings per share for TNET have decreased strongly by -30.77% in the last year.
TNET shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 9.74% yearly.
Looking at the last year, TNET shows a small growth in Revenue. The Revenue has grown by 1.86% in the last year.
The Revenue has been growing slightly by 5.56% on average over the past years.
EPS 1Y (TTM)-30.77%
EPS 3Y-2.17%
EPS 5Y9.74%
EPS Q2Q%-7.87%
Revenue 1Y (TTM)1.86%
Revenue growth 3Y3.63%
Revenue growth 5Y5.56%
Sales Q2Q%2.22%
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 -37.02% on average per year.
EPS Next Y-19.94%
EPS Next 2Y-3.11%
EPS Next 3Y3.45%
EPS Next 5Y17.99%
Revenue Next Year0%
Revenue Next 2Y2.11%
Revenue Next 3Y-37.02%
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 13.39, which indicates a correct valuation of TNET.
Compared to the rest of the industry, the Price/Earnings ratio of TNET indicates a somewhat cheap valuation: TNET is cheaper than 78.05% of the companies listed in the same industry.
TNET's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 27.30.
Based on the Price/Forward Earnings ratio of 13.81, the valuation of TNET can be described as correct.
71.95% of the companies in the same industry are more expensive than TNET, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.76, TNET is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.39 | ||
| Fwd PE | 13.81 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, TNET is valued a bit cheaper than the industry average as 76.83% of the companies are valued more expensively.
Based on the Price/Free Cash Flow ratio, TNET is valued cheaply inside the industry as 90.24% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 7.92 | ||
| EV/EBITDA | 10.89 |
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)1.38
EPS Next 2Y-3.11%
EPS Next 3Y3.45%
5. Dividend
5.1 Amount
TNET has a Yearly Dividend Yield of 1.48%.
TNET's Dividend Yield is a higher than the industry average which is at 2.06.
TNET's Dividend Yield is slightly below the S&P500 average, which is at 2.37.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.48% |
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
29.34% of the earnings are spent on dividend by TNET. This is a low number and sustainable payout ratio.
DP29.34%
EPS Next 2Y-3.11%
EPS Next 3Y3.45%
68.71
-2.49 (-3.5%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCommercial & Professional Services
GICS IndustryProfessional Services
Earnings (Last)
Earnings (Next)
Inst Owners95.08%
Inst Owner Change0%
Ins Owners0.83%
Ins Owner Change9.66%
Market Cap3.33B
Analysts76.67
Price Target89.42 (30.14%)
Short Float %3.6%
Short Ratio4.6
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.48% |
Yearly Dividend0.74
Dividend Growth(5Y)N/A
DP29.34%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)48.29%
Min EPS beat(2)21.71%
Max EPS beat(2)74.88%
EPS beat(4)3
Avg EPS beat(4)25.2%
Min EPS beat(4)-12.75%
Max EPS beat(4)74.88%
EPS beat(8)6
Avg EPS beat(8)22.45%
EPS beat(12)10
Avg EPS beat(12)42.65%
EPS beat(16)14
Avg EPS beat(16)49.27%
Revenue beat(2)0
Avg Revenue beat(2)-1.05%
Min Revenue beat(2)-1.1%
Max Revenue beat(2)-1%
Revenue beat(4)0
Avg Revenue beat(4)-1.34%
Min Revenue beat(4)-2.37%
Max Revenue beat(4)-0.89%
Revenue beat(8)0
Avg Revenue beat(8)-1.81%
Revenue beat(12)1
Avg Revenue beat(12)22.63%
Revenue beat(16)5
Avg Revenue beat(16)101.66%
PT rev (1m)2.73%
PT rev (3m)1.54%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-1.45%
EPS NY rev (1m)0%
EPS NY rev (3m)3.69%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.8%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.31%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.39 | ||
| Fwd PE | 13.81 | ||
| P/S | 0.66 | ||
| P/FCF | 7.92 | ||
| P/OCF | 6.7 | ||
| P/B | 52.79 | ||
| P/tB | N/A | ||
| EV/EBITDA | 10.89 |
EPS(TTM)5.13
EY7.47%
EPS(NY)4.98
Fwd EY7.24%
FCF(TTM)8.68
FCFY12.63%
OCF(TTM)10.25
OCFY14.91%
SpS103.97
BVpS1.3
TBVpS-11.24
PEG (NY)N/A
PEG (5Y)1.38
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.42% | ||
| ROE | 265.08% | ||
| ROCE | 26.04% | ||
| ROIC | 18.5% | ||
| ROICexc | 26.06% | ||
| ROICexgc | 90.1% | ||
| OM | 5.84% | ||
| PM (TTM) | 3.32% | ||
| GM | 17.97% | ||
| FCFM | 8.35% |
ROA(3y)8.22%
ROA(5y)8.76%
ROE(3y)259.1%
ROE(5y)172.1%
ROIC(3y)25.86%
ROIC(5y)24.72%
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 Turnover1.33
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 15.6 | ||
| Debt/FCF | 2.34 | ||
| Debt/EBITDA | 2.67 | ||
| Cap/Depr | 102.7% | ||
| Cap/Sales | 1.51% | ||
| Interest Coverage | 5.07 | ||
| Cash Conversion | 134.78% | ||
| Profit Quality | 251.5% | ||
| Current Ratio | 1.08 | ||
| Quick Ratio | 1.08 | ||
| Altman-Z | 1.84 |
F-Score7
WACC8.56%
ROIC/WACC2.16
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)-30.77%
EPS 3Y-2.17%
EPS 5Y9.74%
EPS Q2Q%-7.87%
EPS Next Y-19.94%
EPS Next 2Y-3.11%
EPS Next 3Y3.45%
EPS Next 5Y17.99%
Revenue 1Y (TTM)1.86%
Revenue growth 3Y3.63%
Revenue growth 5Y5.56%
Sales Q2Q%2.22%
Revenue Next Year0%
Revenue Next 2Y2.11%
Revenue Next 3Y-37.02%
Revenue Next 5YN/A
EBIT growth 1Y-30.33%
EBIT growth 3Y-9.98%
EBIT growth 5Y4.69%
EBIT Next Year0.4%
EBIT Next 3Y5.4%
EBIT Next 5Y16.07%
FCF growth 1Y100.96%
FCF growth 3Y4.13%
FCF growth 5Y-13.95%
OCF growth 1Y83.03%
OCF growth 3Y8.57%
OCF growth 5Y-9.94%