Christian Ryther of Curreen Capital presents TriNet (TNET), a professional employer organization that provides payroll, HR, and health insurance to small and mid-sized businesses, with a client base concentrated in white-collar industries such as technology, financial services, and life sciences. Ryther frames the stock as a turnaround: a new CEO took over in February 2024, earnings have been cut in half, and the shares have fallen roughly 60% (down as much as 75% at their worst). The root cause traces back to COVID, which broke the company’s health insurance cost models. TriNet under-earned during the pandemic as deferred care pushed costs below what had been priced in, then briefly over-earned before costs spiked as deferred care returned alongside broader healthcare inflation. Two consecutive large price increases produced sticker shock among customers and drove a loss of covered employees. Despite the recent turmoil, the historical record is strong — revenue has grown every year except 2011, 2025, and 2026, the company never lost money even in 2009, return on tangible capital has run near 40% (still above 30% today), and ROIC sits around 15%.
Ryther argues the situation is improving: operating income rose year over year in both Q4 2025 and Q1 2026, and pricing is now back in line with competitors. With EPS of $3.35 against a share price of roughly $49.50, the stock trades at a P/E below 14. His base case sees revenue growth resuming and margins normalizing, supporting EPS of $5–6 and a target of $75–110 by 2029 at 15–20x earnings, implying 50–100% upside. The key metric to watch is the covered employee count in 2027, as the thesis requires that figure to hold flat or grow. Ryther identifies the principal risks as AI eliminating employees at small and mid-sized businesses, AI enabling companies to self-service their benefits administration, and the lower-touch ASO model gaining share at the expense of the PEO approach.
Presentation summary generated by AI