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Why Is TransUnion (TRU) Up 3.4% 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 3.4% 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 drivers.

TransUnion Surpasses Q1 Earnings Estimates

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

Adjusted earnings of 91 cents per share beat the consensus mark by 13.8% and increased 24.7% year over year. Total revenues of $745.3 million beat the consensus mark by 5.8% and increased 8% year over year on a reported basis, 8% on a constant-currency basis and 7% on an organic constant-currency basis.

Revenues by Segments

U.S. Market revenues of $468 million were up 11% year over year on a reported basis and 10% on an organic basis. Within the segment, Financial Services revenues of $263 million climbed 14% year over year. Emerging Vertical revenues, including Healthcare, Insurance and all other verticals, were $205 million, up 7% on a reported basis and 4% on an organic basis.

International revenues increased 5% year over year on a reported basis, and 3% on a constant-currency basis, to $166 million. Revenues from Canada increased 15% on a reported basis, and 9% on a constant-currency basis, to $30 million. Revenues from the United Kingdom came in at $50 million, up 3% on a reported basis but down 5% on a constant-currency basis. India revenues increased 10% on a reported basis and 11% on a constant-currency basis, to $34 million. Asia-Pacific revenues came in at $14 million, up 6% on a reported basis and 5% on a constant-currency basis.

Revenues from Latin America decreased 1% on a reported basis, but increased 5% on a constant-currency basis, to $24 million. Africa revenues were down 4% on a reported basis, and 5% on a constant-currency basis, to 14 million. Consumer Interactive segment revenues improved 3% from the prior-year quarter figure to $130 million.

Operating Performance

Adjusted EBITDA was $300 million, up 14% year over year on a reported basis, 13% on a constant-currency basis, and 14% on an organic constant-currency basis. Adjusted EBITDA margin came in at 40.3%, up 100 basis points year over year.

Key Balance Sheet and Cash Flow Figures

TransUnion had $433 million in cash and cash equivalents at the end of the quarter compared with $493 million at the end of the prior quarter. Long-term debt was $3.3 billion, compared with $3.4 billion in the prior quarter. The company generated $144.8 million in cash from operating activities and CapEx was $43.2 million. It paid out $15 million in dividends in the quarter.

Outlook

For the second quarter of 2021, revenues are anticipated between $744 million and $754 million. Adjusted earnings are anticipated to be between 89 and 92 cents per share, above the current Zacks Consensus Estimate of 80 cents. Adjusted EBITDA is anticipated between $296 million and $303 million.

For 2021, the company expects revenues between $2.949 billion and $2.992 billion, higher than the current Zacks Consensus Estimate of $2.87 billion. Adjusted earnings are anticipated between $3.45 and $3.58 per share, above the Zacks Consensus Estimate of $3.3. Adjusted EBITDA is anticipated between $1.157 billion and $1.189 billion.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in fresh estimates. The consensus estimate has shifted 14.53% due to these changes.

VGM Scores

At this time, TransUnion has an average Growth Score of C, though it is lagging a bit on the Momentum Score front with a D. Following the exact same course, 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 D. 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. It comes with little surprise TransUnion has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.


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