Shares of TransUnion (TRU - Free Report) have gained 48.9% on a year-to-date basis, outperforming the 44% growth of the industry it belongs to.
Let’s delve deeper into the factors, which have contributed to the company’s outperformance.
Consecutive Earnings & Revenue Beat
TransUnion reported better-than-expected earnings and revenue performance in the first three quarters of 2019. While the company’s bottom line continued to gain from operational efficiency, the top line performed well on the back of strength across all the segments, namely U.S. Markets, International and Consumer Interactive. Moreover, prospects over its exposure to rapidly expanding Big Data and analytics market are benefiting the stock.
Upbeat 2019 Guidance
TransUnion raised its 2019 guidance for adjusted revenues, adjusted earnings per share and adjusted EBITDA in the last three reported quarters.
During third-quarter 2019, the company raised its full-year adjusted revenue guidance to $2.644-$2.649 billion (indicating a year-over-year increase of 13%) from $2.628-$2.638 billion projected earlier.
Adjusted EPS is anticipated to be $2.74-$2.76, suggesting an improvement of 10%. The previous expectation was $2.66-$2.69 per share.
Adjusted EBITDA is expected to be $1.048-$1.052 million, indicating a year-over-year increase of 14-15%. The previously anticipated range was $1.036-$1.044 million.
Strategic Acquisitions Bode Well
TransUnion’s successful acquisition strategy has played an important role in its growth over the past five to six years. The strategy focuses on investing in unique and differentiated data assets, acquiring new capabilities to expand in vertical markets and expanding international footprint.
Key acquisitions like Drivers History, TLO, eScan, Callcredit and iovation added new data and capabilities, extended the company’s geographic foothold and accelerated its organic growth.
Zacks Rank & Other Stocks to Consider
Currently, TransUnion carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the broader Zacks Business Services sector are Global Payments (GPN - Free Report) , Cardtronics (CATM - Free Report) and FactSet Research Systems (FDS - Free Report) . While Global Payments and Cardtronics sport a Zacks Rank #1 (Strong Buy), FactSet Research Systems carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term expected EPS (three to five years) growth rate for Global Payments, Cardtronics and FactSet Research Systems is 17%, 4% and 9%, respectively.
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