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Why Is TransUnion (TRU) Up 6.1% Since the 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 6.1% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it 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 Beats Q1 Earnings & Revenues, 2017 View Up
TransUnion reported first-quarter 2017 adjusted earnings of $0.42 per share, beating the Zacks Consensus Estimate of $0.36. Robust top-line growth, along with productivity improvement initiatives, drove the company’s profits.
The company generated GAAP net income of $62.3 million or $0.33 per share compared with $12.6 million or $0.07 per share in the year-ago period. Strong growth momentum across the USIS and International segments led to the impressive bottom-line performance.
Revenues for the quarter increased 12% year over year to $455 million, comfortably beating the Zacks Consensus Estimate of $444 million. The increase in revenues was driven by growth across the USIS and International segments.
Segmental Details
Revenues at the USIS segment came in at $282 million, up 14% year over year. Decision Services revenues increased 18% from the year-ago quarter to $58 million. Marketing Services revenues were $42 million, an increase of 14% from the prior-year quarter. Online Data Services revenues grew 13% year over year to $182 million.
International segment’s revenues rose 23% year over year to $83 million. On a constant currency basis, revenues grew an impressive 16%. Revenues from developed markets increased 21% (18% on a constant currency basis) to $28 million, while that from emerging markets went up 24% (15% on a constant currency basis) to $55 million. The company saw 4% growth in revenues from acquisitions in this segment.
Revenues at the Consumer Interactive segment came in at $105 million, down 1% year over year.
Margins
Adjusted EBITDA (earnings before interest, tax, depreciation and amortization) was $171.6 million compared with $141.4 million in the prior-year quarter. Adjusted EBITDA margin was 37.7%, compared with 34.8% in the year-ago quarter.
The USIS segment’s adjusted operating income was $99 million, an increase of 28% from the prior-year quarter. The rise was driven by growth in the top line. The International segment’s adjusted operating income was $24 million, an increase of 43% (36% on a constant currency basis), driven by strong revenue growth and cost reduction. The Consumer Interactive segment’s adjusted operating was $50 million, an increase of 18% year over year.
Balance Sheet and Cash Flow
As of Mar 31, 2017, TransUnion had cash and cash equivalents of $131.2 million, while long-term debt was $2,309.3 million. Cash flow from operating activities was $67.3 million for the reported quarter compared with $41.7 million in the year-earlier quarter.
Guidance
With double digit growth in revenues and adjusted earnings on diligent execution of operational plans, the company increased its earlier guidance for full-year 2017. Consolidated revenues for the full year are expected to be between $1.845 billion and $1.86 billion (a year-over-year increase of 8–9% on constant currency basis), up from $1.835 billion and $1.85 billion expected earlier. Adjusted EPS is expected to be between $1.74 and $1.79, compared with earlier projections in the range of $1.71 and $1.76. This represents year-over-year growth of 16–19%, up from 14–17% expected earlier.
For the second quarter, consolidated revenues are expected to be between $460 million and $465 million. Adjusted EBITDA is expected to be in the range of $176–$180 million. Adjusted EPS is expected to be between $0.42 and $0.43, an increase of 14–17%.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been one revision higher for the current quarter compared to four lower.
At this time, the's stock has a nice Growth Score of 'B', a grade with the same score on the momentum front. However, 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 aggregte VGM Score of 'C'. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks' style scores indicate that the company's stock is suitable for growth and momentum investors.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Notably, the stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.
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Why Is TransUnion (TRU) Up 6.1% Since the Last Earnings Report?
It has been about a month since the last earnings report for TransUnion (TRU - Free Report) . Shares have added about 6.1% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it 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 Beats Q1 Earnings & Revenues, 2017 View Up
TransUnion reported first-quarter 2017 adjusted earnings of $0.42 per share, beating the Zacks Consensus Estimate of $0.36. Robust top-line growth, along with productivity improvement initiatives, drove the company’s profits.
The company generated GAAP net income of $62.3 million or $0.33 per share compared with $12.6 million or $0.07 per share in the year-ago period. Strong growth momentum across the USIS and International segments led to the impressive bottom-line performance.
Revenues for the quarter increased 12% year over year to $455 million, comfortably beating the Zacks Consensus Estimate of $444 million. The increase in revenues was driven by growth across the USIS and International segments.
Segmental Details
Revenues at the USIS segment came in at $282 million, up 14% year over year. Decision Services revenues increased 18% from the year-ago quarter to $58 million. Marketing Services revenues were $42 million, an increase of 14% from the prior-year quarter. Online Data Services revenues grew 13% year over year to $182 million.
International segment’s revenues rose 23% year over year to $83 million. On a constant currency basis, revenues grew an impressive 16%. Revenues from developed markets increased 21% (18% on a constant currency basis) to $28 million, while that from emerging markets went up 24% (15% on a constant currency basis) to $55 million. The company saw 4% growth in revenues from acquisitions in this segment.
Revenues at the Consumer Interactive segment came in at $105 million, down 1% year over year.
Margins
Adjusted EBITDA (earnings before interest, tax, depreciation and amortization) was $171.6 million compared with $141.4 million in the prior-year quarter. Adjusted EBITDA margin was 37.7%, compared with 34.8% in the year-ago quarter.
The USIS segment’s adjusted operating income was $99 million, an increase of 28% from the prior-year quarter. The rise was driven by growth in the top line. The International segment’s adjusted operating income was $24 million, an increase of 43% (36% on a constant currency basis), driven by strong revenue growth and cost reduction. The Consumer Interactive segment’s adjusted operating was $50 million, an increase of 18% year over year.
Balance Sheet and Cash Flow
As of Mar 31, 2017, TransUnion had cash and cash equivalents of $131.2 million, while long-term debt was $2,309.3 million. Cash flow from operating activities was $67.3 million for the reported quarter compared with $41.7 million in the year-earlier quarter.
Guidance
With double digit growth in revenues and adjusted earnings on diligent execution of operational plans, the company increased its earlier guidance for full-year 2017. Consolidated revenues for the full year are expected to be between $1.845 billion and $1.86 billion (a year-over-year increase of 8–9% on constant currency basis), up from $1.835 billion and $1.85 billion expected earlier. Adjusted EPS is expected to be between $1.74 and $1.79, compared with earlier projections in the range of $1.71 and $1.76. This represents year-over-year growth of 16–19%, up from 14–17% expected earlier.
For the second quarter, consolidated revenues are expected to be between $460 million and $465 million. Adjusted EBITDA is expected to be in the range of $176–$180 million. Adjusted EPS is expected to be between $0.42 and $0.43, an increase of 14–17%.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been one revision higher for the current quarter compared to four lower.
TransUnion Price and Consensus
TransUnion Price and Consensus | TransUnion Quote
VGM Scores
At this time, the's stock has a nice Growth Score of 'B', a grade with the same score on the momentum front. However, 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 aggregte VGM Score of 'C'. If you aren't focused on one strategy, this score is the one you should be interested in.
Zacks' style scores indicate that the company's stock is suitable for growth and momentum investors.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Notably, the stock has a Zacks Rank #3 (Hold). We are looking for an inline return from the stock in the next few months.