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Why Is TransUnion (TRU) Down 7.5% 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 lost about 7.5% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is TransUnion due for a breakout? 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's Q3 Earnings and Revenues Beat Estimates
TransUnion reported impressive third-quarter 2024 results, wherein earnings and revenues beat the Zacks Consensus Estimate.
TRU’s quarterly adjusted earnings (adjusting 69 cents from non-recurring items) of $1 per share surpassed the consensus mark by 2% and increased 14.3% on a year-over-year basis. Total revenues of $1.1 billion outpaced the consensus mark by 2.2% and increased 12% from the year-ago quarter.
TransUnion's Revenues by Segments
The U.S. Markets segment’s revenues of $848 million increased 12% year over year and surpassed our estimate of $816.3 million. Within the segment, Financial Services’ revenues of $367 million grew 17% from the year-ago quarter. Emerging Vertical revenues were $307 million, which increased 3% on a year-over-year basis. Consumer Interactive revenues were $174 million, which rose 21% from the third quarter of 2023.
The International segment’s revenues increased 11% year over year on a reported basis and 12% on a constant-currency basis to $242 million, and beat our expectation of $240.5 million. Revenues from Canada were $39 million, which grew 7% year over year on a reported basis and 9% on a constant-currency basis. The metric missed our estimate of $40.8 million.
Revenues from India gained 21% on a reported basis and 23% on a constant-currency basis to $68 million and missed our anticipation of $68.7 million. Revenues from the Asia-Pacific were $26 million, up 11% from the year-ago quarter on a reported basis and a constant-currency basis, marginally missing our estimate.
Revenues from Latin America rose 7% on a reported basis and 13% on a constant-currency basis to $33 million and missed our anticipated figure by a slight margin. Revenues from Africa increased 12% on a reported basis and 10% on a constant-currency basis to $17 million, surpassing our estimate of $14.9 million. Revenues from the U.K. were $58 million, up 6% year over year on a reported basis and 4% on a constant-currency basis, outpacing our projection of $56.4 million.
TRU's Operating Performance
Adjusted EBITDA was $377 million, marking year-over-year growth of 11% on both reported and constant-currency basis. The reported figure beat our estimate of 368.4 million. The adjusted EBITDA margin was 36.2%, 120 basis points higher than the year-ago figure.
Balance Sheet and Cash Flow of TRU
TransUnion had $643.2 million in cash and cash equivalents at the end of the quarter compared with $543.2 million at the end of the second quarter of 2024. The long-term debt was $5.1 billion compared with $5.2 billion in the previous quarter.
Cash generated from operating activities in the quarter was $229.3 million. Capital expenditure was $68 million.
TransUnion's Q4 & 2024 Outlook
For the fourth quarter of 2024, TransUnion expects revenue outlook to $1.01-$1.03 billion. TRU's expects the adjusted earnings per share (EPS) to 92-98 cents. The guidance for the adjusted EBITDA was $360-$375 million.
For 2024, TransUnion raised its guidance for revenues to $4.16-$4.18 billion from the previous quarter’s view of $4.10-$4.14 billion. TRU hiked its adjusted EPS guidance to $3.87-$3.93 from the $3.78-$3.90 view given in the previous quarter. Adjusted EBITDA has been raised to $1.48-$1.5 billion from the $1.46-$1.49 billion view given in the previous quarter.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
VGM Scores
At this time, TransUnion has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% 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 broadly trending downward for the stock, and the magnitude of these revisions has been net zero. Notably, TransUnion has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Why Is TransUnion (TRU) Down 7.5% Since Last Earnings Report?
A month has gone by since the last earnings report for TransUnion (TRU - Free Report) . Shares have lost about 7.5% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is TransUnion due for a breakout? 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's Q3 Earnings and Revenues Beat Estimates
TransUnion reported impressive third-quarter 2024 results, wherein earnings and revenues beat the Zacks Consensus Estimate.
TRU’s quarterly adjusted earnings (adjusting 69 cents from non-recurring items) of $1 per share surpassed the consensus mark by 2% and increased 14.3% on a year-over-year basis. Total revenues of $1.1 billion outpaced the consensus mark by 2.2% and increased 12% from the year-ago quarter.
TransUnion's Revenues by Segments
The U.S. Markets segment’s revenues of $848 million increased 12% year over year and surpassed our estimate of $816.3 million. Within the segment, Financial Services’ revenues of $367 million grew 17% from the year-ago quarter. Emerging Vertical revenues were $307 million, which increased 3% on a year-over-year basis. Consumer Interactive revenues were $174 million, which rose 21% from the third quarter of 2023.
The International segment’s revenues increased 11% year over year on a reported basis and 12% on a constant-currency basis to $242 million, and beat our expectation of $240.5 million. Revenues from Canada were $39 million, which grew 7% year over year on a reported basis and 9% on a constant-currency basis. The metric missed our estimate of $40.8 million.
Revenues from India gained 21% on a reported basis and 23% on a constant-currency basis to $68 million and missed our anticipation of $68.7 million. Revenues from the Asia-Pacific were $26 million, up 11% from the year-ago quarter on a reported basis and a constant-currency basis, marginally missing our estimate.
Revenues from Latin America rose 7% on a reported basis and 13% on a constant-currency basis to $33 million and missed our anticipated figure by a slight margin. Revenues from Africa increased 12% on a reported basis and 10% on a constant-currency basis to $17 million, surpassing our estimate of $14.9 million. Revenues from the U.K. were $58 million, up 6% year over year on a reported basis and 4% on a constant-currency basis, outpacing our projection of $56.4 million.
TRU's Operating Performance
Adjusted EBITDA was $377 million, marking year-over-year growth of 11% on both reported and constant-currency basis. The reported figure beat our estimate of 368.4 million. The adjusted EBITDA margin was 36.2%, 120 basis points higher than the year-ago figure.
Balance Sheet and Cash Flow of TRU
TransUnion had $643.2 million in cash and cash equivalents at the end of the quarter compared with $543.2 million at the end of the second quarter of 2024. The long-term debt was $5.1 billion compared with $5.2 billion in the previous quarter.
Cash generated from operating activities in the quarter was $229.3 million. Capital expenditure was $68 million.
TransUnion's Q4 & 2024 Outlook
For the fourth quarter of 2024, TransUnion expects revenue outlook to $1.01-$1.03 billion. TRU's expects the adjusted earnings per share (EPS) to 92-98 cents. The guidance for the adjusted EBITDA was $360-$375 million.
For 2024, TransUnion raised its guidance for revenues to $4.16-$4.18 billion from the previous quarter’s view of $4.10-$4.14 billion. TRU hiked its adjusted EPS guidance to $3.87-$3.93 from the $3.78-$3.90 view given in the previous quarter. Adjusted EBITDA has been raised to $1.48-$1.5 billion from the $1.46-$1.49 billion view given in the previous quarter.
How Have Estimates Been Moving Since Then?
It turns out, estimates revision have trended downward during the past month.
VGM Scores
At this time, TransUnion has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% 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 broadly trending downward for the stock, and the magnitude of these revisions has been net zero. Notably, TransUnion has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.