Stifel maintains Buy rating and $97 target on TriNet stock

On Monday, Stifel analysts maintained a Buy rating and a $97.00 price target for TriNet Group (NYSE:TNET), a professional employer organization providing small and medium-sized businesses with full-service HR solutions. With the stock currently trading at $83.26, this target implies significant upside potential. According to InvestingPro data, analysts’ targets range from $76 to $97, with the company showing strong profitability metrics over the last twelve months. Following a recent conference, the analysts highlighted the company’s ongoing strategic initiatives.

TriNet’s CEO, Mike Simonds, and VP of Investor Relations, Alex Bauer, presented at Stifel’s 2025 CSI Conference last week. The management team discussed the current macroeconomic trends, which they described as "muted but stable," and outlined their continued efforts in executing the company’s strategy. InvestingPro analysis reveals that management has been actively supporting shareholder value through aggressive share buybacks, while maintaining a moderate debt level. This strategy includes repricing segments of its insurance book, enhancing its product offerings, and significantly improving its selling and go-to-market workflows.

The year 2025 is seen as a transition period for TriNet, but Stifel analysts anticipate that the benefits of the company’s strategic actions will become apparent later in the year. They expect the results from the 2025 seasonal selling period to start materializing in the fourth quarter and carry over into the first quarter of the following year.

Stifel’s analysis suggests that TriNet is currently trading at 10.5 times its projected 2026 EBITDA based on what they consider to be depressed estimates. They believe this valuation presents a very compelling risk/reward scenario for investors.

TriNet provides a range of human resources solutions to its clients, including payroll processing, human capital consulting, employment law compliance, and employee benefits, among other services. The company’s focus on improving its offerings and market approach is part of its broader goal to enhance its competitive position and financial performance. With revenue of nearly $5 billion in the last twelve months and a market capitalization of $4 billion, TriNet maintains a strong market presence while delivering a return on invested capital of 15%.

In other recent news, TriNet Group Inc. reported impressive financial results for the first quarter of 2025, surpassing market expectations. The company announced an adjusted earnings per share (EPS) of $1.99, well above the anticipated $1.60, and achieved a revenue of $1.26 billion, marking a 1% increase from the previous year. Following these announcements, TriNet’s stock saw a notable surge, reflecting investor confidence in the company’s strategic direction. The firm is exiting its SaaS-only business to concentrate on its core HR solutions, aiming for revenue growth acceleration and improved margins by 2026.

TriNet has also provided a positive outlook for the remainder of 2025, with full-year revenue guidance projected between $4.95 billion and $5.14 billion. The company expects adjusted EBITDA margins to range from 7% to 8.5%. In terms of operational changes, TriNet is focusing on repricing its healthcare offerings, which has impacted new sales but is expected to stabilize over time. The company has also seen a slight decline in total worksite customers, down 3% year-over-year, but remains optimistic about its strategic initiatives.

Analysts have noted that TriNet’s strategic focus and effective cost management have positioned it well against competitors. The company is working on launching new commercial initiatives in time for the fall selling season, which includes benefit plan bundles aimed at simplifying offerings and improving sales processes. Despite some challenges, such as declining small business confidence and healthcare pricing uncertainties, TriNet remains confident in its ability to achieve its annual guidance.

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