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Transunion (TRU) Shares Climb 2.1% Since Q4 Earnings Release

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TransUnion (TRU - Free Report) reported impressive fourth-quarter 2023 results wherein earnings and revenues beat the Zacks Consensus Estimate.

Quarterly adjusted earnings of 70 cents per share (adjusting 67 cents from non-recurring items) surpassed the consensus mark by 14.8% and ended flat on a year-over-year basis. Total revenues of $954.3 million surpassed the consensus mark by 3% and increased 5.8% year over year on a reported basis. Revenues were up 5% on a constant-currency basis, mainly driven by strength in international markets.

The stock has gained 2.1% since the earnings release on Feb 14 in response to the better-than-expected results.

Revenues by Segments

The U.S. Markets segment’s revenues of $608 million were up 3% year over year and surpassed our estimate of $580.3 million. Within the segment, Financial Services’ revenues of $305 million showed an increase of 3% year over year. Emerging Vertical revenues were $303 million, up 2% on a reported basis.

TransUnion Price, Consensus and EPS Surprise

TransUnion Price, Consensus and EPS Surprise

TransUnion price-consensus-eps-surprise-chart | TransUnion Quote

The International segment’s revenues increased 14% year over year on a reported basis and 13% on a constant-currency basis to $215 million and surpassed our estimate by 10.5%. Revenues from Canada increased 14% year over year on a reported basis and 14% year over year on a constant-currency basis to $36 million, beating our estimate of $34.4 million.

Revenues from India increased 28% on a reported basis and 30% on a constant-currency basis to $57 million and beat our estimated $56.3 million. Revenues from Asia-Pacific were $23 million, up 14% on a reported basis and 13% on a constant-currency basis, but lagging our estimate of $24.1 million.

Revenues from Latin America increased 13% on a reported basis and 5% on a constant-currency basis to $31 million and missed our estimated $31.3 million. Revenues from Africa increased 3% on a reported basis and 12% on a constant-currency basis to $16 million, missing our estimated $15.5 million. Revenues from the UK were $51 million, up 3% on a reported basis and down 4% on a constant-currency basis.

The Consumer Interactive segment’s revenues of $150 million gained 7% year over year on a reported basis and beat our estimate by 9.3%.

Operating Performance

Adjusted EBITDA was $326 million, indicating an increase of 1% year over year on a reported basis and 1% on a constant-currency basis and beating our estimate by 4.8%. The adjusted EBITDA margin was 34%, 200 basis points lower than the year-ago figure.

Balance Sheet and Cash Flow

TransUnion had $479.9 million in cash and cash equivalents at the end of the quarter compared with $420.9 million at the end of the prior quarter. Long-term debt was $5.25 billion compared with the previous quarter.

Cash generated from operating activities during the quarter was $205.5 million. Capital expenditure was $97.5 million.

Outlook

For the first quarter of 2024, TransUnion expects revenues between $971 million and $980 million. The Zacks Consensus Estimate is pegged at $976.8 million, higher than the midpoint ($975.5 million) of the guided range. The company anticipates adjusted earnings per share (EPS) to be 79-81 cents for the first quarter of 2024. The consensus estimate for the same is higher at 83 cents. Adjusted EBITDA is anticipated to be between $324 million and $331 million.

For 2024, TransUnion expects revenues to be between $3.96 billion and $4.02 billion. The Zacks Consensus Estimate lies higher than the midpoint ($3.99 billion) of the guided range at $4 billion. The company anticipates adjusted EPS to be $3.57 to $3.74 for the first quarter of 2024. The consensus estimate for the same is higher than the midpoint ($3.66) at $3.69. Adjusted EBITDA is anticipated to be between $1.39 billion and $1.44 billion.

TRU currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Earnings Snapshot of Some Business Services Stocks

Automatic Data Processing, Inc. (ADP - Free Report)  reported impressive second-quarter fiscal 2024 results, wherein earnings and revenues beat the respective Zacks Consensus Estimate.

Adjusted EPS of $2.13 beat the consensus estimate by 1.4% and grew 8.7% from the year-ago fiscal quarter’s figure.

Total revenues of $4.67 billion surpassed the consensus estimate by 0.2% and improved 6.3% from the year-ago fiscal quarter’s reading on a reported basis as well on an organic constant-currency basis.

Booz Allen Hamilton Holding Corp. (BAH - Free Report) reported better-than-expected third-quarter fiscal 2024 results.

Quarterly adjusted EPS of $1.41 surpassed the Zacks Consensus Estimate by 24.8% and exceeded the year-ago quarter by 31.8%. The company reported revenues of $2.57 billion, which beat the consensus estimate by 1.5% and increased 12.9% year over year. Revenues, excluding billable expenses, were $1.77 billion, up 13% year over year.

Waste Management Inc. (WM - Free Report) reported impressive fourth-quarter 2023 results, wherein earnings and revenues beat the respective Zacks Consensus Estimate.

Adjusted EPS of $1.74 surpassed the Zacks Consensus Estimate by 13.7% and improved 33.9% year over year. Total revenues of $5.2 billion beat the consensus estimate by a slight margin and increased 5.7% year over year.

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