Shares of TransUnion (TRU - Free Report) have gained 22.8% over the past year compared with 17.7% increase of the industry.
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 last five quarters. While operating efficiency has been aiding the company’s bottom line, strength across segments benefited the top line. Moreover, the company’s exposure to rapidly expanding Big Data and analytics market has been a positive.
Huge Data Base
TransUnion’s gigantic treasure trove of data is its most distinguishing asset and also perhaps the biggest barrier to entry for competitors. Acquiring or building such data involves huge costs, making it extremely difficult for a new company to build the contacts and data that TransUnion already has. This strengthens TransUnion's ability to retain its competitive advantage and protect its market share.
Strategic Acquisitions Bode Well
TransUnion’s successful acquisition strategy has played an important role in its growth over the last five to six years. The strategy focuses on investing in unique and differentiated data assets, acquiring new capabilities for expansion in vertical markets and expanding international footprint. In 2019, the company acquired TruSignal, a people-based marketing technology company. This should strengthen TransUnion’s digital marketing solutions. In 2018, TransUnion had acquired Rubixis, Callcredit, iovation and Healthcare Payment Specialists. These buyouts have helped the company to foray into new markets, diversify its portfolio and strengthened its top line.
Zacks Rank and Stocks to Consider
TransUnion currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Zacks Business Services sector are CoreLogic (CLGX - Free Report) , SPS Commerce (SPSC - Free Report) and SailPoint Technologies Holdings, Inc. (SAIL - Free Report) . All the stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The long-term expected earnings per share (three to five years) growth rate for CoreLogic, SPS Commerce and SailPoint is 12%, 15% and 15%, respectively.
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