TD Cowen analyst Jared Levine maintained a Buy rating on TriNet Group (TNET – Research Report) yesterday and set a price target of $126.00.
Jared Levine has given his Buy rating to the TriNet Group due to a combination of factors.
His rating is primarily based on the company’s Q3 adjusted EPS/EBITDA, which significantly surpassed the market’s expectation. This was primarily due to their Interim Control Reviews (ICR) and careful expense management. Although the Q3/Q4 revenue fell short of expectations due to weaker than anticipated Cost of Insurance (CIE) and headwinds from mix shift, the company demonstrated solid execution with new client sales. TriNet Group showcased accelerating bookings growth in Q3, with a year-over-year increase of 43%, and anticipates a record retention rate.
Despite the downside of CIE stealing the spotlight, TriNet Group has continued to show solid execution in sales, retention, and expense management. The company is experiencing a rapid growth in new client bookings, with a 42% year-over-year increase after a 26% growth in Q2. This trend is expected to persist into Q4, backed by a record pipeline supporting further acceleration in bookings growth. Additionally, TriNet Group is forecasting a 600 basis points year-over-year improvement in Workforce Size (WSE) retention in FY23, which would match their record levels. This is supported by record Net Promoter Score (NPS) scores, indicating improvements in both product tech stack and its services.
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Based on the recent corporate insider activity of 93 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of TNET in relation to earlier this year.
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TriNet Group (TNET) Company Description:
TriNet Group, Inc. provides human resources solutions including industry solutions to small and mid sized businesses. Its services include payroll processing tax administration, employee benefits and a human resource technology platform with online and mobile tools and also employee onboarding and termination, compensation reporting, expense management, and benefits enrollment and administration. The company was founded by Martin Babinec in 1988 and is headquartered in Dublin, CA.
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