Shares of TriNet (NYSE:TNET) came under pressure following its Q3 financial performance. Though this human resource solutions provider to small and medium-sized businesses delivered better-than-expected Q3 financial results, its worksite employees (WSE) remained flat year-over-year, reflecting the impact of the macro slowdown.
TNET stock closed over 14% lower on Wednesday. Meanwhile, it is down about 31% year-to-date.
TriNet delivered adjusted earnings of $1.64 a share in Q3, exceeding the Street’s estimate of $1.02. The strong earnings beat reflected lower-than-expected insurance costs. While its bottom line improved, TNET’s CFO, Kelly Tuminelli, noted that in Q3, the company had “almost 352,000 worksite employees, flat year-over-year.”
Tuminelli said, “Volume in the quarter was impacted by slower new sales growth as we remain disciplined in our customer selection, particularly as we guard against potential risks from an economic slowdown.”
Citing the weakness in WSE amid macro challenges, Cowen analyst Jared Levine lowered his price target on TNET stock to $70 from $75. However, he maintained a Hold recommendation.
Bottom Line: Is TNET Stock a Buy, Sell, or Hold
TNET stock has a Hold consensus rating on TipRanks based on one Buy, two Hold, and one Sell recommendation. Though the company is expanding its product line, macro uncertainty could limit the recovery in the short term. Meanwhile, TNET’s average price target of $82.75 implies 26% upside potential.
Overall, TriNet stock has a Smart Score of seven out of 10 on TipRanks, implying a Neutral outlook.
