A wise investment decision involves buying well-performing stocks at the right time while selling those at risk.
We believe TransUnion (TRU - Free Report) , with a market capitalization of $16 billion and long-term (three to five years) expected EPS growth rate of 14%, has the potential to perform well and should be on investors’ radar.
Here’s why the stock is currently a good pick.
Solid Rank: TransUnion has a Zacks Rank #2 (Buy). Our research shows that stocks with a Zacks Rank #1 (Strong Buy) or #2 offer attractive investment opportunities for investors. You can see the complete list of today’s Zacks #1 Rank stocks here.
Northward Estimate Revisions: Nine estimates for 2020 have moved north over the past 60 days versus no southward revision, reflecting analysts’ confidence in the company. Over the same period, the Zacks Consensus Estimate for 2020 has climbed 12.9%.
TransUnion Price and Consensus
Earnings Surprise History: TransUnion has an impressive earnings surprise history. The company outpaced the consensus mark in the last four quarters, delivering an earnings surprise of 13.7%, on average.
Earnings Growth Prospects: The Zacks Consensus Estimate for 2020 earnings is currently pegged at $2.88, indicating year-over-year growth of 3.2%. Earnings are expected to grow 12.2% in 2021.
Growth Factors: TransUnion is benefiting from the Big Data and analytics market, which is expanding at a rapid pace as companies comprehend the advantages of building an analytical enterprise where decisions are derived from data and insights.
The company’s business model ensures highly recurring and diversified revenue streams. In the second quarter of 2020, the company’s U.S. market revenues of $405 million were flat year over year on a reported as well as on an organic basis. Also, International revenues rose 8% year over year on a reported basis and 12% on a constant-currency basis to $158 million.
In response to the COVID-19 pandemic, the company continues to follow the work-from-home model and is trying to be disciplined in managing investment priorities and cost structure. It recently launched CreditVision Acute Relief Suite, a collection of tools for lenders and insurers to evaluate customers impacted by the coronavirus-induced tough economic time.
The recent acquisition of Signal is expected to bolster TransUnion’s marketing abilities through people-based identity-enabled marketing solutions.
Other Stocks to Consider
Some other top-ranked stocks in the broader Zacks Business Services sector are CoreLogic, Inc. (CLGX - Free Report) , BG Staffing, Inc. (BGSF - Free Report) and Elastic N.V. (ESTC - Free Report) . While CoreLogic and BG Staffing sport a Zacks Rank #1, Elastic carries a Zacks Rank #2.
The long-term expected earnings per share (three to five years) growth rate for CoreLogic, BG Staffing and Elastic is 12%, 20% and 26%, respectively.
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