On Oct 4, Zacks Investment Research updated the research report on business services provider TransUnion (TRU - Analyst Report) .
Headquartered in Chicago, IL, TransUnion is a premier consumer information services firm that offers data and analytics solutions, particularly in credit risk management. Its addressable market includes the burgeoning Big Data and analytics, 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.
Research firm IDC projects that global revenues from Big Data and analytics services will reach $187 billion in 2019 from nearly $122 billion in 2015. Numerous underlying trends are supporting this growth, including the creation of massive amounts of data, advances in technology and analytics that allow data to be processed more swiftly and efficiently, and mounting demand for these business insights across industries and geographies.
In order to capitalize on the immense growth potential of this market, TransUnion is seeking to strengthen its analytics capabilities through strategic acquisitions and collaborations. The company recently acquired RTech (Healthcare Revenue Technologies, Inc) – a technology-driven healthcare services firm, to enhance its healthcare business by leveraging data, technology and analytics to help healthcare providers make the most of its lucrative business potential.
At the same time, TransUnion entered into a strategic partnership with SavvyMoney, wherein both entities will work mutually to enhance their financial data analytical offerings to the customers. Headquartered in Pleasanton, CA, SavvyMoney is a leading provider of credit information services. It works toward empowering its customers to take full control of their finances by providing easy to understand actionable advice about their credits. The company provides free ongoing access to their credit score, explains the factors that impact it, and recommends actions to improve it. The deal will help TransUnion’s consumers get personalized credit information services using SavvyMoney’s highly advanced credit system.
Earlier in June, the company also acquired healthcare services firm, Auditz LLC to broaden its product line with Auditz' innovative Transfer DRG (diagnosis related groups) solution. The DRG solution optimizes the recovery of costs associated with Medicare patient transfer, which often results in the underpayment of millions of dollars per year to care providers. This would bring new capabilities to TransUnion to facilitate healthcare providers better manage their revenue cycles.
TransUnion has an attractive business model with highly recurring and diversified revenue streams, significant operating leverage, low capital requirements and strong and stable cash flows. Impressively, it deals with the 10 largest U.S. banks, the top 5 credit card issuers, the biggest 25 auto lenders and thousands of healthcare providers and federal, state and local government agencies. The company also keeps making significant investments to modernize its infrastructure and facilitate the seamless transition to the latest Big Data and analytics technologies. This enables TransUnion to expand its business and improve its cost structure.
We remain impressed by the healthy growth prospects of this Zacks Rank #3 (Hold) stock. Some better-ranked stocks in the industry include Hooper Holmes Inc. (HH - Snapshot Report) , National Research Corp. (NRCIB - Snapshot Report) and S&P Global, Inc. (SPGI - Analyst Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Hooper Holmes is a leading provider of health information services in the U.S., primarily catering to the life insurance industry.
National Research Corp. posted an average positive earnings surprise of 7.8% in the trailing four quarters, beating estimates twice.
S&P Global has a long-term earnings growth expectation of 12.3% and is currently trading at a forward P/E of 24.0x. S&P Global has a positive earnings surprise history with an average of 6.7% in the trailing four quarters, comprehensively beating estimates in each quarter.
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