TriNet's Momentum Remains Strong Amidst Macro Uncertainty: Analyst Maintains Buy Rating

Needham analyst Kyle Peterson reiterated the Buy rating on TriNet Group, Inc. TNET, raising the price target to $120 from $115.

Despite a challenging operating environment, TNET posted upbeat 2Q23 results that beat the Street estimates on the top and bottom lines. 

TNET announced that the Board had approved a $1 billion increase to the share repurchase authorization and that management is exploring ways to repurchase up to $1 billion in stock in FY23, which could add significant accretion to the EPS estimates, Peterson notes.

Overall, the analyst remains positive on TNET, given the strong momentum despite increased macro uncertainty. 

With the shares trading at a P/E multiple of 15.5x of the analyst's FY24 estimate, Peterson views the risk-reward as favorable for GARP investors.

The analyst believes TNET has solidified its positioning as a leading provider of PEO and HR solutions for small and medium-sized businesses.

Peterson is optimistic about PEO and HR space as small businesses and changing regulations become increasingly complex and believes that TNET will benefit from the trend towards flexible HR solutions that allow SMBs to focus on operating their businesses.

Price Action: TNET shares are trading higher by 5.5% to $100.97 on the last check Thursday.