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Why Is TransUnion (TRU) Down 7.9% 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 7.9% 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 catalysts.
TransUnion's Q1 Earnings in Line, Revenues Beat Estimates
TransUnion’s first-quarter 2022 earnings matched the Zacks Consensus Estimate while revenues beat the same. There has not been any major price change since the earnings release on Apr 26.
Adjusted earnings of 93 cents per share increased 2.2% year over year, driven by adjusted EBITDA growth, and came above the midpoint (92.5 cents) of the guided range,. Total revenues of $921.3 million beat the consensus mark by 1.1% and increased 23.6% year over year on a reported basis. Revenues were up 32% on a constant-currency basis and 8% on an organic constant-currency basis, mainly driven by growth in U.S. Markets and International. Revenues surpassed the guided range of $906 million to $914 million.
Overall, favorable macroeconomic conditions, revival of the company’s growth-oriented portfolio from the pandemic blues, robust sales performance and ongoing innovations acted as tailwinds for TransUnion in the quarter.
TransUnion has integrated Sontiq and Neustar acquisitions successfully. Sontiq fetched around $23 million in revenues in the quarter and is expected to deliver mid-teens revenue growth in 2022, excluding integration costs. Neustar generated $150 million in revenues and is expected to deliver high single-digit organic revenue growth in 2022 and low double-digit revenue growth in 2023 and beyond.
Revenues by Segments
U.S. Market revenues of $600 million were up 42% year over year on a reported basis and 7% on an organic basis. Within the segment, Financial Services revenues of $276 million climbed 5% year over year. Emerging Vertical revenues, including Neustar, Insurance and all other verticals, were $323 million, up more than 100% on a reported basis and 10% on an organic basis.
International revenues increased 15% year over year on a reported basis, and 18% on a constant-currency basis, to $191 million. Revenues from Canada increased 1% year over year on a reported as well as a constant-currency basis, to $31 million. Revenues from the United Kingdom came in at $56 million, up 12% on a reported basis and 15% on a constant-currency basis. India revenues increased 33% on a reported basis and 37% on a constant-currency basis, to $45 million. Asia-Pacific revenues came in at $17million, up 23% on a reported basis and 25% on a constant-currency basis.
Revenues from Latin America increased 13% on a reported basis and 17% on a constant-currency basis, to $27 million. Africa revenues were up 8% on a reported basis and 9% on a constant-currency basis, to 15 million.
Consumer Interactive segment revenues of $150 million, which include revenues from Sontiq, improved 15% year over year on a reported basis. Revenues declined 3% year over year on an organic basis.
Operating Performance
Adjusted EBITDA was $334.2 million, up 20.4% year over year on a reported basis and 21% on a constant-currency basis. Adjusted EBITDA margin came in at 36.3%, down 340 basis points year over year.
Balance Sheet and Cash Flow
TransUnion had $1.3 billion in cash and cash equivalents at the end of the quarter compared with $1.8 billion at the end of the prior quarter. Long-term debt was $5.8 billion compared with $6.3 billion reported in the prior quarter. The company generated $11.2 million in cash from operating activities and CapEx was $58.6 million. TransUnion paid out $19 million in dividends in the quarter.
Outlook
For the second quarter of 2022, TransUnion expects revenues to be between $958 million and $968 million. The company anticipates adjusted EPS to be in the range of 96 cents to 99 cents. Adjusted EBITDA is anticipated between $347 million and $353 million.
Transunion has raised its 2022 guidance. The company now expects revenues between $3.85 billion and $3.9 billion, compared with the previous guidance of $3.752 billion and $3.81 billion. The company anticipated adjusted EPS to be in the range of $3.84 to $3.98. Adjusted EBITDA is anticipated between $1.405 billion and $1.44 billion.
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 subpar Growth Score of D, a grade with the same score on the momentum front. Charting a somewhat similar path, 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 D. 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 indicates a downward shift. It's no surprise TransUnion has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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Why Is TransUnion (TRU) Down 7.9% Since Last Earnings Report?
A month has gone by since the last earnings report for TransUnion (TRU - Free Report) . Shares have lost about 7.9% 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 catalysts.
TransUnion's Q1 Earnings in Line, Revenues Beat Estimates
TransUnion’s first-quarter 2022 earnings matched the Zacks Consensus Estimate while revenues beat the same. There has not been any major price change since the earnings release on Apr 26.
Adjusted earnings of 93 cents per share increased 2.2% year over year, driven by adjusted EBITDA growth, and came above the midpoint (92.5 cents) of the guided range,. Total revenues of $921.3 million beat the consensus mark by 1.1% and increased 23.6% year over year on a reported basis. Revenues were up 32% on a constant-currency basis and 8% on an organic constant-currency basis, mainly driven by growth in U.S. Markets and International. Revenues surpassed the guided range of $906 million to $914 million.
Overall, favorable macroeconomic conditions, revival of the company’s growth-oriented portfolio from the pandemic blues, robust sales performance and ongoing innovations acted as tailwinds for TransUnion in the quarter.
TransUnion has integrated Sontiq and Neustar acquisitions successfully. Sontiq fetched around $23 million in revenues in the quarter and is expected to deliver mid-teens revenue growth in 2022, excluding integration costs. Neustar generated $150 million in revenues and is expected to deliver high single-digit organic revenue growth in 2022 and low double-digit revenue growth in 2023 and beyond.
Revenues by Segments
U.S. Market revenues of $600 million were up 42% year over year on a reported basis and 7% on an organic basis. Within the segment, Financial Services revenues of $276 million climbed 5% year over year. Emerging Vertical revenues, including Neustar, Insurance and all other verticals, were $323 million, up more than 100% on a reported basis and 10% on an organic basis.
International revenues increased 15% year over year on a reported basis, and 18% on a constant-currency basis, to $191 million. Revenues from Canada increased 1% year over year on a reported as well as a constant-currency basis, to $31 million. Revenues from the United Kingdom came in at $56 million, up 12% on a reported basis and 15% on a constant-currency basis. India revenues increased 33% on a reported basis and 37% on a constant-currency basis, to $45 million. Asia-Pacific revenues came in at $17million, up 23% on a reported basis and 25% on a constant-currency basis.
Revenues from Latin America increased 13% on a reported basis and 17% on a constant-currency basis, to $27 million. Africa revenues were up 8% on a reported basis and 9% on a constant-currency basis, to 15 million.
Consumer Interactive segment revenues of $150 million, which include revenues from Sontiq, improved 15% year over year on a reported basis. Revenues declined 3% year over year on an organic basis.
Operating Performance
Adjusted EBITDA was $334.2 million, up 20.4% year over year on a reported basis and 21% on a constant-currency basis. Adjusted EBITDA margin came in at 36.3%, down 340 basis points year over year.
Balance Sheet and Cash Flow
TransUnion had $1.3 billion in cash and cash equivalents at the end of the quarter compared with $1.8 billion at the end of the prior quarter. Long-term debt was $5.8 billion compared with $6.3 billion reported in the prior quarter. The company generated $11.2 million in cash from operating activities and CapEx was $58.6 million. TransUnion paid out $19 million in dividends in the quarter.
Outlook
For the second quarter of 2022, TransUnion expects revenues to be between $958 million and $968 million. The company anticipates adjusted EPS to be in the range of 96 cents to 99 cents. Adjusted EBITDA is anticipated between $347 million and $353 million.
Transunion has raised its 2022 guidance. The company now expects revenues between $3.85 billion and $3.9 billion, compared with the previous guidance of $3.752 billion and $3.81 billion. The company anticipated adjusted EPS to be in the range of $3.84 to $3.98. Adjusted EBITDA is anticipated between $1.405 billion and $1.44 billion.
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 subpar Growth Score of D, a grade with the same score on the momentum front. Charting a somewhat similar path, 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 D. 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 indicates a downward shift. It's no surprise TransUnion has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.