TNET · Trinet Group
Conviction · Low · more likely to lag the S&P 500 over the next three months
Wrong if: a daily close above $75.78
Note written ·
Price against the kill line
13.1% clear of its kill line on the 13 November 2026 close.
How to read this
This note expects the shares to lag the market, so its kill line sits above the price: a close above the red mark would prove the view wrong. Prices run from low on the left to high on the right. The dot is where the stock closed on 13 November 2026, left of the mark while it is below the line; a dot right of the mark has closed through it.
The scale is stretched near the line, so close calls are easy to see. More than 8% from the line, the stock reads well clear, with a hollow dot to show the figure is off the drawn scale.
The kill line is the research note's own test. The portfolio sells on business facts, not on a price. How the portfolio decides
Three months against the kill line
Daily closes, to . Red: the kill line, a daily close above $75.78, on record since 11 November 2026. The shares are down 1.4% since the close; the S&P 500 is down 2.1% over the same sessions. Figures in the note can cover a different window.
Kill line
A daily close above $75.78, just under the 52-week intraday high set on 23 October 2026, which would show the shares leading again. A full-year 2026 revenue result above the $4.90 billion top of guidance would also point that way.
Research onlyNot in the portfolio.
Key figures from the filings · Industrials
Quarter to 30 September 2026, filed 29 October 2026; valuation at the 13 November 2026 close
- Revenue, latest quarter ($M)
- 1,175
- Revenue, change on a year (%)
- −4.6
- Operating margin (%)
- 3.3
- Free cash flow, four quarters ($M)
- 286
- Net cash, cash less debt ($M)
- −518
- Price to earnings (×)
- 17.5
- Enterprise value to sales (×)
- 0.7
- Free-cash-flow yield (%)
- 9.5
All filed numbers
What Trinet Group reports to the SEC in its quarterly and annual filings. Each group states its period and filing date once; a figure dated otherwise says so. Built from the filings known on .
| Quarter to | Revenue ($M) | On a year (%) | Operating margin (%) |
|---|---|---|---|
| first filed | 1,175 | −4.6 | 3.3 |
| first filed | 1,178 | −4.8 | 6.3 |
| first filed | 1,226 | −5.1 | 10.0 |
| first filed | 1,248 | −2.3 | — |
| first filed | 1,232 | −1.6 | 4.1 |
| first filed | 1,238 | −0.4 | 4.1 |
| Pre-tax income ($M) | 39.0 |
| Net income ($M) four quarters: 172 | 31.0 |
| Diluted shares, change on a year (%) against the quarter to 30 September 2025 | −2.1 |
| Operating cash flow ($M) | 378 |
| Capital spending ($M) | 92.0 |
| Free cash flow ($M) | 286 |
| Cash and short-term investments ($M) | 378 |
| Debt ($M) non-current long-term debt | 896 |
| Net cash, cash less debt ($M) | −518 |
| Deferred revenue ($M) +2.3% on a year | 44.0 |
| Backlog, orders not yet delivered ($M) | Not reported |
| Receivables ($M) | 7.0 |
| Inventory ($M) | Not reported |
| Shareholders' equity ($M) | 133 |
| Market value ($M) | 3,018 |
| Enterprise value, market value plus net debt ($M) | 3,536 |
| Enterprise value to sales (×) | 0.7 |
| Enterprise value to operating income (×) | Not available |
| Price to earnings (×) | 17.5 |
| Price to book value (×) | 22.7 |
| Free-cash-flow yield (%) | 9.5 |
Short interest (FINRA, settled 15 October 2026, published 26 October 2026): 3.8% of shares outstanding sold short, 5.3 days of average trading to cover, −6.9% since the previous report.
| Window | Bought | Sold |
|---|---|---|
| 90 daysfrom | $0 | $295K |
| 12 monthsfrom | $189K | $944K |
The thesis
TriNet Group's shares are more likely to lag than beat the S&P 500 over the next three months. The margin repair is confirmed, but revenue and client counts are shrinking, and the fourth-quarter 2026 report (expected around February 2027, date not yet announced) decides whether volumes stabilise.
TriNet reported an insurance cost ratio of 89% for the third quarter on 29 October 2026, inside its 88.5–89.5% full-year range. It raised full-year adjusted earnings guidance to $5.10 per share. Revenue was $1.175 billion against a $1.180 billion consensus estimate, and the shares fell 11% that day, per TIKR.
The shares closed at $65.34 on 12 November 2026. That is 14.7% below the 52-week intraday high of $76.59 set on 23 October 2026. The three-month change is –4.5%.
Bullish and bearish views on Trinet Group, Inc.
The bull case on Trinet Group, Inc. (TNET), in brief: the cost test passed. The bear case: revenue and clients keep shrinking.
Bull case
- The cost test passed. The third-quarter insurance cost ratio was 89%, a point better than the 90% a year earlier, per TriNet's 29 October 2026 results as relayed by TIKR. The second quarter's 86% ratio had included a $21 million recovery of prior-year health care costs, and the third-quarter ratio held without one.
- Earnings guidance moved up. Company news on 29 October 2026 shows full-year adjusted earnings per share guidance raised to $5.10 from a $4.50–$5.10 range, against a $4.87 consensus estimate. Guidance for earnings under accounting standards rose to $3.35 from $2.85–$3.35.
- Quarterly profit beat. Adjusted earnings per share were $0.94 against a $0.60 consensus estimate on 29 October 2026.
Bear case
- Revenue and clients keep shrinking. Third-quarter revenue was $1.175 billion, down 5% from a year earlier and below the $1.180 billion estimate. Worksite employees, the staff TriNet handles for small-business clients, fell 11% to about 295,000, per TIKR on 29 October 2026.
- Guidance implies a weak fourth quarter. TIKR reports management expects revenue toward the bottom of the $4.75–$4.90 billion range and adjusted earnings at the top of $4.50–$5.10. TIKR's author calculates about $0.13 per share for the fourth quarter, against $0.46 a year earlier.
- Repricing cost clients. TIKR attributes the client losses to health-plan repricing that helped margins but pushed some customers out. It also reports that ADP and Paychex both grew their professional employer organization (PEO) worksite counts.
- Analysts remain cautious. TD Cowen kept a Hold rating and lowered its price target to $65 on 30 October 2026.
- Insiders sold into August strength. SEC Form 4 filings show a director sold 2,400 shares at $69.70 on 27 August 2026, and two executives sold under Rule 10b5-1 trading plans at $68.53 and $69.80 on 20 August 2026 and 19 August 2026. No open-market insider purchases appear among the filings since 15 August 2026.
Price setup
The shares closed at $65.34 on 12 November 2026. The 50-day average of the adjusted closes is $66.98, so the shares sit below it. The 200-day average is $53.20, well below the last close.
The recent closes ran $67.33 on 5 November 2026, $66.63 on 6 November 2026, $64.63 on 9 November 2026 and $66.30 on 10 November 2026. TD Cowen's $65 target sits close to the last close. The 52-week closing low was $33.85 on 23 February 2026.
The market has priced in the margin recovery: the shares rose from that February low to $76.59 on 23 October 2026, then lost 11% on 29 October 2026 when worksite employees and revenue fell.
Catalysts ahead
- ~February 2027 (est.): TriNet fourth-quarter 2026 results and first 2027 guidance; date not yet announced. Shows whether worksite employee losses are easing and whether the insurance cost ratio holds without one-time help.
What would change the view
A daily close above $75.78, just under the 52-week intraday high set on 23 October 2026, which would show the shares leading again. A full-year 2026 revenue result above the $4.90 billion top of guidance would also point that way.
What it trades with
Insperity (NSP) is the closest peer, with the same PEO model and pooled-plan health cost mechanics, so its results move the read-through on insurance costs. ADP and Paychex grew PEO worksite counts, per TIKR on 29 October 2026, which makes TriNet's losses look company-specific. Small-business employment and health-claims trends affect all of them.
The evidence, claim by claim (7)
- Third-quarter 2026 adjusted earnings per share were $0.94 against a $0.60 estimate; sales were $1.175 billion against a $1.180 billion estimate. Company news, TriNet third-quarter 2026 results · as of
- Full-year adjusted earnings per share guidance raised to $5.10 from a $4.50–$5.10 range (estimate $4.87); revenue guidance of $4.75–$4.90 billion affirmed. Company news, TriNet third-quarter 2026 results · as of
- Third-quarter insurance cost ratio was 89% against 90% a year earlier; worksite employees fell 11% to about 295,000; revenue fell 5%. TIKR, TriNet third-quarter 2026 coverage · as of
- Shares fell 11% on the day of the third-quarter report as revenue and worksite employees shrank. TIKR · as of
- TD Cowen kept a Hold rating and lowered its price target to $65. Company news, TD Cowen note · as of
- Director Paul Chamberlain sold 2,400 shares at $69.70 on 27 August 2026. SEC Form 4 filed 31 August 2026 · as of
- Closed at $65.34; 50-day average $66.98; 200-day average $53.20; three-month change –4.5%. Adjusted daily closes · as of
Sources