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TransUnion (TRU) Up 4.3% Since Last Earnings Report: Can It Continue?

Zacks Equity Research
·4-min read

A month has gone by since the last earnings report for TransUnion (TRU). Shares have added about 4.3% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is TransUnion due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

TransUnion Surpasses Q3 Earnings Estimates

TransUnion reported impressive third-quarter 2021 results, wherein its earnings and revenues surpassed the Zacks Consensus Estimate.

Adjusted earnings of $1.01 per share beat the consensus mark by 8.6% and increased 24.7% year over year. Total revenues of $792 million beat the consensus mark by 2.2% and increased 14% year over year on a reported basis, 13% on a constant-currency basis and 12% on an organic constant-currency basis.

Revenues by Segments

U.S. Market revenues of $498 million were up 14% year over year on a reported basis and 12% on an organic basis. Within the segment, Financial Services revenues of $278 million climbed 11% year over year. Emerging Vertical revenues, including Healthcare, Insurance and all other verticals, were $221 million, up 17% on a reported basis and 14% on an organic basis.

International revenues increased 23% year over year on a reported basis, and 18% on a constant-currency basis, to $178 million. Revenues from Canada increased 10% on a reported basis, and 4% on a constant-currency basis, to $31 million. Revenues from the United Kingdom came in at $55 million, up 24% on a reported basis and 16% on a constant-currency basis. India revenues increased 44% on a reported as well as on a constant-currency basis, to $35 million. Asia-Pacific revenues came in at $16 million, up 10% on a reported basis and 11% on a constant-currency basis.

Revenues from Latin America increased 23% on a reported basis and 22% on a constant-currency basis, to $27 million. Africa revenues were up 23% on a reported basis and 8% on a constant-currency basis, to 15 million.

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Consumer Interactive segment revenues improved 3% from the prior-year quarter figure to $135 million.

Operating Performance

Adjusted EBITDA was $327 million, up 21% year over year on a reported basis, 20% on a constant-currency as well as organic constant-currency basis. Adjusted EBITDA margin came in at 41.3%, up 250 basis points year over year.

Key Balance Sheet and Cash Flow Figures

TransUnion had $709 million in cash and cash equivalents at the end of the quarter compared with $526 million at the end of the prior quarter. Long-term debt was $3.3 billion, flat with the prior-quarter figure. The company generated $280 million in cash from operating activities and CapEx was $61 million. It paid out $18.2 million in dividends in the quarter.

Outlook

For the fourth quarter of 2021, revenues are anticipated between $764 million and $774 million.

Adjusted earnings are anticipated to be between 88 and 91 cents per share.  Adjusted EBITDA is anticipated between $293 million and $301 million.

For 2021, the company expects revenues between $3.075 billion and $3.085 billion.

Adjusted earnings are anticipated between $3.76 and $3.79 per share, Adjusted EBITDA is anticipated between $1.239 billion and $1.247 billion.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended upward during the past month.

VGM Scores

Currently, TransUnion has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, TransUnion has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.


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