Is Now An Opportune Moment To Examine TriNet Group, Inc. (NYSE:TNET)?

While TriNet Group, Inc. (NYSE:TNET) might not have the largest market cap around , 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. With many analysts covering the mid-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Today we will analyse the most recent data on TriNet Group’s outlook and valuation to see if the opportunity still exists.

Check out 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. In this instance, we’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. we find that TriNet Group’s ratio of 17.46x is below its peer average of 25.94x, which indicates the stock is trading at a lower price compared to the Professional Services industry. However, given that TriNet Group’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

Can we expect growth from TriNet Group?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. 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 negative profit outlook does bring on some uncertainty, which equates to higher risk. We recommend you think about 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 tabs on TNET for some time, 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.

If you want to dive deeper into TriNet Group, you'd also look into what risks it is currently facing. When we did our research, we found 3 warning signs for TriNet Group (1 makes us a bit uncomfortable!) that we believe deserve your full attention.

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.