Yahoo Finance Is It Time To Consider Buying TriNet Group, Inc. (NYSE:TNET)?
TriNet Group, Inc. (NYSE:TNET), might not be a large cap stock, but it saw a double-digit share price rise of over 10% in the past couple of months on the NYSE. The company is now trading at yearly-high levels following the recent surge in its share price. As a mid-cap stock with high coverage by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. But what if there is still an opportunity to buy? Let’s examine TriNet Group’s valuation and outlook in more detail to determine if there’s still a bargain opportunity.
View our latest analysis for TriNet Group
What's The Opportunity In TriNet Group?
Great news for investors – TriNet Group is still trading at a fairly cheap price according to our price multiple model, where we compare the company's price-to-earnings ratio to the industry average. We’ve used the price-to-earnings ratio in this instance because there’s not enough visibility to forecast its cash flows. The stock’s ratio of 17.41x is currently well-below the industry average of 25.89x, meaning that it is trading at a cheaper price relative to its peers. Although, there may be another chance to buy again in the future. This is because TriNet Group’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.
What does the future of TriNet Group look like?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. However, with a negative profit growth of -7.8% expected over the next couple of years, near-term growth certainly doesn’t appear to be a driver for a buy decision for TriNet Group. This certainty tips the risk-return scale towards higher risk.
What This Means For You
Are you a shareholder? Although TNET is currently trading below the industry PE ratio, the adverse prospect of negative growth brings about some degree of risk. Consider whether you want to increase your portfolio exposure to TNET, or whether diversifying into another stock may be a better move for your total risk and return.
Are you a potential investor? If you’ve been keeping an eye on TNET for a while, but hesitant on making the leap, we recommend you dig deeper into the stock. Given its current price multiple, now is a great time to make a decision. But keep in mind the risks that come with negative growth prospects in the future.
So if you'd like to dive deeper into this stock, it's crucial to consider any risks it's facing. Be aware that TriNet Group is showing 3 warning signs in our investment analysis and 1 of those can't be ignored...
If you are no longer interested in TriNet Group, you can use our free platform to see our list of over 50 other stocks with a high growth potential.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
