TNET
TriNet Group, Inc.
$42.78
Platform & Compounding FCF
50%
Two-stage FCF DCF
Strong
·
Conviction
Undervalued
Trading 59.6% below fair value
You pay
$42.78
Bear
$90.87
Fair
$105.84
Bull
$119.26
Bear
$90.87
+112.4%
4% stage 1 growth, 11% discount
Fair
$105.84
+147.4%
7% stage 1 growth, 11% discount
Bull
$119.26
+178.8%
9% stage 1 growth, 11% discount
Key Value Driver
FCF growth rate (7% base case)
Terminal Value % of EV
36%
Implied Market Multiple
3.7x
Summary
Our base-case estimate uses a two-stage discounted cash flow model based on free cash flow. We then blend that result with the average analyst price target of $68.50 from 14 analysts, using a 20% weight on analyst consensus. That produces an estimated intrinsic value of $105.84 per share.
Warnings
Stock-based employee pay equals 42% of profits. This dilutes existing shareholders, so cash flow alone overstates what owners really earn.
Wall Street's average price target is $68.50 (from 14 analysts). Our estimate is 68% above the consensus -- consider that gap carefully.
Key Risks
- P/E alone misleads — earnings depressed by growth investment
- Cyclical or commodity businesses may be misclassified as platforms
- Terminal value dominance suggests sensitivity to long-run assumptions