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TransUnion (TRU) Surpasses Q4 Earnings & Revenue Estimates

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TransUnion TRU reported solid fourth-quarter 2019 results, wherein its earnings and revenues surpassed the Zacks Consensus Estimate.

Adjusted earnings of 75 cents per share outpaced the consensus mark by 5.6% and improved 13.6% year over year. The reported figure exceeded the company’s guided range of 69-71 cents.

Total revenues of $685.6 million beat the consensus mark by 1.7% and increased 11.8% year over year on a reported basis, 12% on a constant-currency basis as well as on an organic constant-currency basis.

Adjusted revenues (excluding the impact of deferred revenue purchase accounting reductions and other adjustments to revenues for the company’s recently acquired entities) came in at $685.6 million, up 10% year over year on a reported basis, at constant currency and at organic constant currency. The reported figure exceeded the company’s guided range of $667-$672 million.

We observe that shares of TransUnion have gained 55.5% over the past year, outperforming the 38.9% growth of the industry it belongs to.


 Revenue Growth Across All Segments

The U.S. Markets revenues of $415 million increased 12% year over year on a reported basis as well as on an organic basis. Within the segment, Financial Services revenues of $222 million increased 16% year over year on a reported and organic basis. Emerging Verticals revenues, including Healthcare, Insurance and all other verticals, were $193 million, up 8% year over year on a reported basis and 7% on an organic basis.

International revenues rose 18% year over year on a reported basis and 19% on a constant-currency basis to $166 million. Adjusted revenues also came in at $166 million, up 10% year over year on a reported basis and 11% on a constant-currency basis. Revenues from Canada, United Kingdom, Africa, India and Asia Pacific increased year over year on a reported as well as constant-currency basis.

Revenues at the Consumer Interactive segment improved 2% from the prior-year quarter figure to $123 million.

Operating Results

Adjusted EBITDA was $275 million, up 11% year over year on a reported basis, constant-currency basis and organic constant-currency basis. Adjusted EBITDA margin came in at 40.2% compared with 39.9% in the prior-year quarter.

Balance Sheet and Cash Flow

TransUnion had $274.1 million in cash and cash equivalents at the end of fourth-quarter 2019 compared with $235.9 million at the end of the prior quarter. Long-term debt was $3.59 billion, compared with $3.65 billion in the prior quarter. The company generated $196.3 million in cash from operating activities and CapEx was $66.4 million. The company paid out $14.2 million in dividends in the quarter.

TransUnion Price, Consensus and EPS Surprise


TransUnion Price, Consensus and EPS Surprise

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

Q1 Outlook

For the first quarter of 2020, TransUnion expects adjusted revenues between $681 million and $685 million, suggesting an improvement of 9-10% year over year.

Adjusted EPS is expected between 69 cents and 70 cents, indicating a rise of 15-17% year over year. The Zacks Consensus Estimate for the same is 69 cents.

Adjusted EBITDA is anticipated in the range of $261-$264 million, suggesting an increase of 9-10%.

2020 View

TransUnion unveiled its 2020 guidance. The company now expects adjusted revenues between $2.857 billion and $2.872 billion, indicating year-over-year increase of 7-8%.

Adjusted EPS is anticipated in the band of $3.14-$3.18, suggesting improvement of 13-14%. The Zacks Consensus Estimate of $3.12 lies below the guided range.

Adjusted EBITDA is expected in the range of $1.141-$1.151 million, indicating year-over-year increase of 8-9%.

Zacks Rank & Upcoming Releases

Currently, TransUnion carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Investors interested in the broader Zacks Business Services sector are awaiting fourth-quarter 2019 earnings of key players like Stericycle SRCL, ICF International ICFI and ServiceMaster , each slated to release their results on Feb 27.

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