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TriNet Group (TNET)
NYSE:TNET
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TriNet Group
(NYSE:TNET)
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Rating:59Neutral
Price Target:
$72.00
â–²(5.98% Upside)
TriNet's overall stock score reflects strong revenue growth and cash flow generation, which are positive indicators. However, significant risks from declining profit margins, high leverage, and bearish technical indicators weigh down the score. The mixed sentiment from the earnings call adds to the cautious outlook.
Positive Factors
Revenue Growth
Strong revenue growth reflects robust demand in the staffing industry, indicating effective market positioning and service offerings.
Cash Flow Generation
Strong cash generation enhances liquidity, providing financial flexibility for investments and debt management.
Expense Management
Disciplined expense management through automation and workforce strategy supports operational efficiency and profitability.
Negative Factors
Declining Profit Margins
Declining profit margins indicate increased cost pressures, challenging the company's ability to maintain profitability.
High Leverage
High leverage poses financial risk, limiting flexibility and increasing vulnerability to economic downturns.
Customer Attrition
Increased customer attrition affects revenue stability and growth, necessitating strategies to enhance client retention.
TriNet Group (TNET) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$3.34B
Dividend Yield1.55%
Average Volume (3M)412.93K
Price to Earnings (P/E)23.4
Beta (1Y)0.81
Revenue Growth1.39%
EPS Growth-50.47%
CountryUS
Employees343,025
SectorIndustrials
Sector Strength72
IndustryStaffing & Employment Services
Share Statistics
EPS (TTM)1.15
Shares Outstanding48,589,930
10 Day Avg. Volume390,229
30 Day Avg. Volume412,926
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)N/A
P/FCF RatioN/A
Enterprise Value/Market Cap0.93
Enterprise Value/Revenue0.61
Enterprise Value/Gross Profit3.45
Enterprise Value/Ebitda9.43
Forecast
1Y Price Target
$78.00Price Target Upside14.81% Upside
Rating ConsensusHold
Number of Analyst Covering6
TriNet Group Business Overview & Revenue Model
Company DescriptionTriNet Group, Inc. provides human resources (HR) solutions, payroll services, employee benefits, and employment risk mitigation services for small and midsize businesses in the United States. The company offers multi-state payroll processing and tax administration; employee benefits programs, including health insurance and retirement plans; workers compensation insurance and claims management; employment and benefits law compliance; and other HR related services. It serves clients in various industries, including technology, professional services, financial services, life sciences, not-for-profit, property management, retail, manufacturing, and hospitality. The company sells its solutions through its direct sales organization. TriNet Group, Inc. was incorporated in 1988 and is headquartered in Dublin, California.
How the Company Makes MoneyTriNet generates revenue primarily through its Professional Employer Organization (PEO) model, where it partners with clients to co-employ their workforce. The company charges a fee based on a percentage of the total payroll, which includes various services like payroll processing, employee benefits management, and risk mitigation. Key revenue streams include service fees from PEO clients, fees for additional HR services, and commissions from insurance products offered to clients. TriNet also benefits from economies of scale and strategic partnerships with insurance carriers and technology providers, which enhance its service offerings and competitiveness in the market.
TriNet Group Earnings Call Summary
Earnings Call Date:Jul 25, 2025
(Q2-2025)
| % Change Since: |
Next Earnings Date:Oct 22, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture with several positive achievements, such as in-line revenue and earnings, successful benefit repricing, and disciplined expense management. However, these were countered by challenges like higher customer attrition, a decline in co-employee WSEs, and a higher-than-expected insurance cost ratio.Q2-2025 Updates
Positive Updates
Revenue and Earnings in Line with Expectations
TriNet delivered financial and operating performance consistent with expectations, allowing the reiteration of their full-year outlook. Total revenue was flat year-over-year, supported by insurance repricing and interest income.
Improvement in Customer Hiring
Customer hiring showed improvement, up about 0.5 percentage points over the prior year. This second quarter is the first Q2 in several years with year-over-year improvement.
Successful Repricing of Benefit Offerings
TriNet is on track with repricing efforts, achieving a 9% increase in health fees per enrolled member compared to the prior year, with strong customer retention.
Disciplined Expense Management
Expenses declined 2% year-over-year, benefiting from automation and workforce strategy, with continued reinvestment into strategic initiatives.
Positive Growth in New Sales Proposals
Strength in new business proposals for Q3 and expansion of go-to-market approach with national and local broker partnerships.
Negative Updates
Higher Customer Attrition
Overall WSE volume declined due to higher customer attrition than new sales, driven largely by health fee increases.
Decline in Co-Employee WSEs
Co-employee WSEs were down 8% year-over-year due to reduced new sales and higher attrition.
Insurance Cost Ratio Above Expectations
The insurance cost ratio was slightly higher than expected, at a little over 90%, driven by a higher proportion of older health claims.
Professional Services Revenue Decline
Professional services revenue declined 8% year-over-year, due to lower WSE volumes and discontinuation of a specific client-level technology fee.
Company Guidance
During TriNet's second quarter 2025 earnings call, the company reiterated its full-year financial outlook, projecting total revenues between $4.9 billion and $5.1 billion and adjusted EBITDA margins of 10% to 11%. The guidance emphasized expectations for a compounded annual growth rate of 4% to 6% in total revenues and annualized value creation of 13% to 15% through earnings growth, share repurchases, and dividends. The call highlighted a significant 9% increase in health fees per enrolled member, contributing to a 1% growth in insurance revenue. The company also reported a slight improvement in customer hiring, up about 0.5 percentage points year-over-year, despite the challenging market environment. TriNet's focus on improving distribution capabilities and reducing expenses while achieving its insurance cost ratio target range of 90% to 92% by 2026 was also discussed. Adjusted earnings per diluted share for the full year are expected to range from $3.25 to $4.75, with Q2 adjusted EBITDA reaching $105 million, representing an 8.5% margin.TriNet Group Financial Statement Overview
Summary
TriNet Group exhibits strong revenue growth and cash flow generation, indicating business expansion and liquidity. However, declining profit margins and high leverage pose significant risks to financial stability. Operational inefficiencies and high debt levels need to be addressed to improve overall financial health.Income Statement
TriNet Group's revenue growth is strong at 23.7% TTM, indicating robust demand in the staffing industry. However, the gross profit margin has declined to 17.8% TTM from 22.3% in 2023, suggesting increased cost pressures. The net profit margin has also decreased to 2.8% TTM, reflecting challenges in maintaining profitability. The negative EBIT margin of -4.8% TTM is concerning, indicating operational inefficiencies.65
Positive
Balance Sheet
The company's debt-to-equity ratio is extremely high at 9.67 TTM, indicating significant leverage and potential financial risk. The return on equity has dropped to 1.57% TTM, reflecting reduced profitability for shareholders. The equity ratio of 2.9% TTM suggests a low proportion of equity financing, increasing vulnerability to financial instability.40
Negative
Cash Flow
TriNet Group's free cash flow growth is impressive at 49.7% TTM, indicating strong cash generation capabilities. The operating cash flow to net income ratio of 4.82 TTM suggests efficient cash conversion. However, the free cash flow to net income ratio of 0.94 TTM indicates that most of the net income is being converted into free cash flow, which is positive for liquidity.75
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 5.08B | 5.05B | 4.92B | 4.88B | 4.54B | 4.03B |
| Gross Profit | 903.00M | 952.00M | 1.10B | 1.12B | 937.00M | 793.00M |
| EBITDA | 330.00M | 363.00M | 662.00M | 610.00M | 520.00M | 446.00M |
| Net Income | 144.00M | 173.00M | 375.00M | 355.00M | 338.00M | 272.00M |
Balance Sheet | ||||||
| Total Assets | 3.69B | 4.12B | 3.69B | 3.44B | 3.31B | 3.04B |
| Cash, Cash Equivalents and Short-Term Investments | 1.51B | 360.00M | 352.00M | 430.00M | 747.00M | 358.00M |
| Total Debt | 1.03B | 1.02B | 1.14B | 552.00M | 547.00M | 430.00M |
| Total Liabilities | 3.58B | 4.05B | 3.62B | 2.67B | 2.43B | 2.44B |
| Stockholders Equity | 107.00M | 69.00M | 78.00M | 775.00M | 881.00M | 607.00M |
Cash Flow | ||||||
| Free Cash Flow | 654.00M | 281.00M | 470.00M | 506.00M | 178.00M | 510.00M |
| Operating Cash Flow | 694.00M | 279.00M | 545.00M | 562.00M | 218.00M | 546.00M |
| Investing Cash Flow | 195.00M | 153.00M | -70.00M | -226.00M | -135.00M | -151.00M |
| Financing Cash Flow | -457.00M | -207.00M | -546.00M | -536.00M | 12.00M | -208.00M |
TriNet Group Technical Analysis
Negative
67.94
Price Trends
67.36
Positive
72.97
Negative
77.94
Negative
Market Momentum
-0.02
Positive
46.78
Neutral
22.33
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TNET, the sentiment is Negative. The current price of 67.94 is below the 20-day moving average (MA) of 69.65, above the 50-day MA of 67.36, and below the 200-day MA of 77.94, indicating a neutral trend. The MACD of -0.02 indicates Positive momentum. The RSI at 46.78 is Neutral, neither overbought nor oversold. The STOCH value of 22.33 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TNET.
TriNet Group Risk Analysis
TriNet Group disclosed 29 risk factors in its most recent earnings report. TriNet Group reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
TriNet Group Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | 118.94B | 29.42 | 65.93% | 2.13% | 7.07% | 9.66% | |
75 Outperform | 1.19B | 22.75 | 23.85% | 0.71% | 9.48% | 11.62% | |
66 Neutral | 46.98B | 28.48 | 40.15% | 3.19% | 5.56% | -1.91% | |
64 Neutral | 3.55B | 19.93 | 13.57% | 6.81% | -6.95% | -41.84% | |
59 Neutral | $3.34B | 23.45 | 139.13% | 1.55% | 1.39% | -50.47% | |
49 Neutral | 1.93B | 49.03 | 35.71% | 4.75% | 2.40% | -75.66% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% |
* Industrials Sector Average
Performance Comparison
TNET
TriNet Group
68.03
-26.09
-27.72%
ADP
Automatic Data Processing
289.22
19.60
7.27%
BBSI
Barrett Business Services
45.00
8.83
24.41%
NSP
Insperity
50.87
-33.08
-39.40%
PAYX
Paychex
128.27
-0.55
-0.43%
RHI
Robert Half
33.79
-29.24
-46.39%
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.