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Trinet Group Inc TNET

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Stock XNYS Rating as of
$110.99 +2.14 (1.97%)
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As of Delayed Price Closed
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Company Report

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TriNet Earnings: Rising Insurance Costs and Modest Hiring Offset by Improving Retention

Emma Williams

Narrow-moat TriNet reported mixed second -quarter 2024 results that met our top-line expectations but fell short of our profitability assumptions amid ongoing pressure from elevated insurance costs. As consistent with management’s guidance, TriNet’s insurance costs are normalizing from pandemic-era lows amid rising utilization and health cost inflation. We expect TriNet to pass through elevated costs through regular quarterly repricing, and for the insurance cost ratio to normalize to 89% from 2025 onward.

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Price vs Fair Value

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TNET is trading at a 259% premium.
Price
$110.99
Fair Value
$768.00
Uncertainty
High
1-Star Price
$467.50
5-Star Price
$13.00
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

Rising regulatory complexity, dispersed workforces, and fierce competition for labor are attractive tailwinds for TriNet and PEO peers.

Bears

TriNet is exposed to the small-business market, which is more susceptible to natural attrition and heightened risk of failure in an economic downturn.

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News

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Trading Information

Previous Close Price
$108.85
Day Range
$108.15–116.26
52-Week Range
$96.76–134.67
Bid/Ask
$92.60 / $0.00
Market Cap
$5.61 Bil
Volume/Avg
594,045 / 359,898

Key Statistics

Price/Earnings (Normalized)
15.31
Price/Sales
1.18
Dividend Yield (Trailing)
0.45%
Dividend Yield (Forward)
0.90%
Total Yield
21.20%

Company Profile

TriNet offers outsourced payroll and human capital management solutions for small and midsize businesses via a professional employer organization model. Under the PEO model, TriNet enters a co-employment arrangement and acts as the employer of record for administrative and regulatory purposes for clients’ employees, known as worksite employees. Clients leverage the scale and expertise of TriNet to access competitive employee benefits, share employment risk liability, access compliance support, and outsource mission-critical day-to-day HR functions such as payroll and tax administration. Following the acquisition of Zenefits and Clarus R+D in 2022, TriNet derives the minority of its revenue from self-service HCM software and R&D tax credit services.
Sector
Industrials
Industry
Staffing & Employment Services
Stock Style Box
Small Core
Total Number of Employees
5,500
Website
https://www.trinet.com

Competitors

Valuation

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Metric
TNET
PCTY
ADP
Price/Earnings (Normalized)
 15.3123.2828.23
Price/Book Value
 55.177.6722.38
Price/Sales
 1.186.285.53
Price/Cash Flow
 11.2719.3619.09
Price/Earnings
TNET
PCTY
ADP

Financial Strength

Metric
TNET
PCTY
ADP
Quick Ratio
 0.300.140.12
Current Ratio
 1.041.131.01
Interest Coverage
 6.86—13.46
Quick Ratio
TNET
PCTY
ADP

Profitability

Metric
TNET
PCTY
ADP
Return on Assets (Normalized)
 10.36%8.69%6.59%
Return on Equity (Normalized)
 146.54%39.73%94.48%
Return on Invested Capital (Normalized)
 28.43%37.09%52.00%
Return on Assets
TNET
PCTY
ADP
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