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Why Is TransUnion (TRU) Up 3.1% Since Last Earnings Report?
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It has been about a month since the last earnings report for TransUnion (TRU - Free Report) . Shares have added about 3.1% 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's Q2 Earnings and Revenues Beat Estimates
Adjusted EPS of 69 cents outpaced the consensus mark by 4 cents and improved 11% year over year. Total revenues came in at $662 million, which beat the consensus mark by $17 million, increasing 18% year over year on a reported basis, 19% on a constant-currency basis and 10% on an organic constant-currency basis. This uptick was driven by strong performance across all the operating segments of the company— U.S. Markets, International and Consumer Interactive.
Adjusted revenues (excluding the impact of deferred revenue purchase accounting reductions and other adjustments to revenues for the company’s recently acquired entities) came in at $664 million, up 18% year over year on a reported basis, 19% at constant currency and 10% at organic constant currency. Acquisitions of iovation, HPS, Rubixis, Callcredit and TruSignal drove adjusted revenues.
Y/Y Revenue Growth Came Across All Segments
The U.S. Markets revenues of $406 million increased 13% year over year on a reported basis and 8% on an organic basis. Adjusted revenues also came in at $406 million. Within the segment, Financial Services revenues of $213 million increased 11% and 8%, respectively, on a reported and organic basis. Emerging Verticals revenues including Healthcare, Insurance and all other verticals, were $193 million, up 16% year over year on a reported basis and 8% on an organic basis.
International revenues surged 42% year over year on a reported, 49% on a constant-currency and 20% on an organic constant-currency basis to $151 million. Adjusted revenues came in at $153 million. Canada, Latin America and India revenues increased but Asia Pacific revenues decreased year over year on a reported as well as constant-currency basis. Revenues at the Consumer Interactive segment improved 5% from the prior-year quarter number to $124 million.
Margin Expanded
Adjusted EBITDA was $264 million, up 20% year over year on a reported and 21% at constant currency. Adjusted EBITDA margin of 39.7% expanded 50 basis points (bps) year over year.
Balance Sheet and Cash Flow
TransUnion had $194.7 million in cash and cash equivalents at the end of the second quarter compared with $200.9 million at the end of the prior quarter. Long-term debt was $3.8 billion, compared with roughly $4 billion in the prior quarter. The company generated $177.2 million in cash from operating activities and CapEx was $46.1 million. The company paid out $14.1 million in dividends in the quarter.
Q3 Outlook
For the third quarter of 2019, TransUnion expects adjusted revenues between $672 million and $677 million, reflecting an improvement of 8-9% year over year. Adjusted EBITDA is anticipated in the range of $269-$273 million, mirroring an increase of 10-11%. Adjusted EPS is expected between 69 cents and 71 cents, indicating a rise of 6-8% year over year.
2019 View
TransUnion raised its 2019 guidance. The company now expects adjusted revenues between $2.628 billion and $2.638 billion, reflecting year-over-year increase of 12%. The previous guidance range was between $2.603 billion and $2.618 billion. Adjusted EBITDA is anticipated in the range of $1.036-$1.044 million, reflecting year-over-year increase of 13-14%. The previously anticipated range was $1.025-$1.037 million. Adjusted EPS is anticipated in the band of $2.66-$2.69, indicating improvement of 6-8%. The previous expectation was in the band of $2.60-$2.65.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
VGM Scores
At this time, TransUnion has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% 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 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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Why Is TransUnion (TRU) Up 3.1% Since Last Earnings Report?
It has been about a month since the last earnings report for TransUnion (TRU - Free Report) . Shares have added about 3.1% 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's Q2 Earnings and Revenues Beat Estimates
TransUnion delivered better-than-expected second-quarter 2019 results.
Adjusted EPS of 69 cents outpaced the consensus mark by 4 cents and improved 11% year over year. Total revenues came in at $662 million, which beat the consensus mark by $17 million, increasing 18% year over year on a reported basis, 19% on a constant-currency basis and 10% on an organic constant-currency basis. This uptick was driven by strong performance across all the operating segments of the company— U.S. Markets, International and Consumer Interactive.
Adjusted revenues (excluding the impact of deferred revenue purchase accounting reductions and other adjustments to revenues for the company’s recently acquired entities) came in at $664 million, up 18% year over year on a reported basis, 19% at constant currency and 10% at organic constant currency. Acquisitions of iovation, HPS, Rubixis, Callcredit and TruSignal drove adjusted revenues.
Y/Y Revenue Growth Came Across All Segments
The U.S. Markets revenues of $406 million increased 13% year over year on a reported basis and 8% on an organic basis. Adjusted revenues also came in at $406 million. Within the segment, Financial Services revenues of $213 million increased 11% and 8%, respectively, on a reported and organic basis. Emerging Verticals revenues including Healthcare, Insurance and all other verticals, were $193 million, up 16% year over year on a reported basis and 8% on an organic basis.
International revenues surged 42% year over year on a reported, 49% on a constant-currency and 20% on an organic constant-currency basis to $151 million. Adjusted revenues came in at $153 million. Canada, Latin America and India revenues increased but Asia Pacific revenues decreased year over year on a reported as well as constant-currency basis. Revenues at the Consumer Interactive segment improved 5% from the prior-year quarter number to $124 million.
Margin Expanded
Adjusted EBITDA was $264 million, up 20% year over year on a reported and 21% at constant currency. Adjusted EBITDA margin of 39.7% expanded 50 basis points (bps) year over year.
Balance Sheet and Cash Flow
TransUnion had $194.7 million in cash and cash equivalents at the end of the second quarter compared with $200.9 million at the end of the prior quarter. Long-term debt was $3.8 billion, compared with roughly $4 billion in the prior quarter. The company generated $177.2 million in cash from operating activities and CapEx was $46.1 million. The company paid out $14.1 million in dividends in the quarter.
Q3 Outlook
For the third quarter of 2019, TransUnion expects adjusted revenues between $672 million and $677 million, reflecting an improvement of 8-9% year over year. Adjusted EBITDA is anticipated in the range of $269-$273 million, mirroring an increase of 10-11%. Adjusted EPS is expected between 69 cents and 71 cents, indicating a rise of 6-8% year over year.
2019 View
TransUnion raised its 2019 guidance. The company now expects adjusted revenues between $2.628 billion and $2.638 billion, reflecting year-over-year increase of 12%. The previous guidance range was between $2.603 billion and $2.618 billion. Adjusted EBITDA is anticipated in the range of $1.036-$1.044 million, reflecting year-over-year increase of 13-14%. The previously anticipated range was $1.025-$1.037 million. Adjusted EPS is anticipated in the band of $2.66-$2.69, indicating improvement of 6-8%. The previous expectation was in the band of $2.60-$2.65.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended upward during the past month.
VGM Scores
At this time, TransUnion has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% 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 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.