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Why Is TransUnion (TRU) Up 0.6% Since Last Earnings Report?

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A month has gone by since the last earnings report for TransUnion (TRU - Free Report) . Shares have added about 0.6% in that time frame, underperforming 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 its most recent earnings report in order to get a better handle on the important drivers.

TransUnion Surpasses Q2 Earnings Estimates

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

Adjusted earnings of 96 cents per share beat the consensus mark by 4.4% and increased 45.5% year over year. Total revenues of $774.2 million beat the consensus mark by 3.3% and increased 22% year over year on a reported basis, 20% on a constant-currency basis and 19% on an organic constant-currency basis.

Revenues by Segments

U.S. Market revenues of $485 million were up 20% year over year on a reported basis and 18% on an organic basis. Within the segment, Financial Services revenues of $271 million climbed 22% year over year. Emerging Vertical revenues, including Healthcare, Insurance and all other verticals, were $214 million, up 17% on a reported basis and 13% on an organic basis.

International revenues increased 44% year over year on a reported basis, and 32% on a constant-currency basis, to $172 million. Revenues from Canada increased 41% on a reported basis, and 25% on a constant-currency basis, to $34 million. Revenues from the United Kingdom came in at $53 million, up 36% on a reported basis and 20% on a constant-currency basis. India revenues increased 58% on a reported basis and 54% on a constant-currency basis, to $28 million. Asia-Pacific revenues came in at $16 million, up 27% on a reported as well as constant-currency basis.

Revenues from Latin America increased 51% on a reported basis and 46% on a constant-currency basis, to $26 million. Africa revenues were up 69% on a reported basis and 37% on a constant-currency basis, to 15 million.

Consumer Interactive segment revenues improved 6% from the prior-year quarter figure to $137 million.

Operating Performance

Adjusted EBITDA was $318.6 million, up 31% year over year on a reported basis, 29% on a constant-currency as well as organic constant-currency basis. Adjusted EBITDA margin came in at 41.1%, up 290 basis points year over year.

Key Balance Sheet and Cash Flow Figures

TransUnion had $526.2 million in cash and cash equivalents at the end of the quarter compared with $433 million at the end of the prior quarter. Long-term debt was $3.3 billion, flat with the prior-quarter figure. The company generated $265.7 million in cash from operating activities and CapEx was $53.9 million. It paid out $18.3 million in dividends in the quarter.

Outlook

For the third quarter of 2021, revenues are anticipated between $766 million and $777 million. Adjusted earnings are anticipated to be between 91 and 93 cents per share, above the current Zacks Consensus Estimate of 88 cents. Adjusted EBITDA is anticipated between $301 million and $308 million.

For 2021, the company expects revenues between $3.034 billion and $3.059 billion. Adjusted earnings are anticipated between $3.63 and $3.7 per share, above the Zacks Consensus Estimate of $3.59. Adjusted EBITDA is anticipated between $1.207 billion and $1.225 billion.

How Have Estimates Been Moving Since Then?

It turns out, estimates revision have trended upward during the past month. The consensus estimate has shifted 8.38% due to these changes.

VGM Scores

Currently, TransUnion has an average Growth Score of C, a grade with the same score on the momentum front. 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. 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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