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TransUnion (TRU)
NYSE:TRU
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TransUnion
(NYSE:TRU)
Rating:75Outperform
Price Target:
$98.00
▲(5.67%Upside)
Positive Factors
Financial Performance
TransUnion's first-quarter results exceeded expectations, leading to a strong stock rally.
Growth Prospects
Management expects a sequential acceleration in India, supported by new business wins and a pro-growth Reserve Bank of India.
Management Engagement
The presence of TransUnion's CEO, CFO, and key investor relations executives at a major conference indicates strong management involvement and transparency.
Negative Factors
Future Outlook
Ongoing ups and downs are expected until there is further clarity on the macro outlook.
Guidance
Q2 guidance is slightly below consensus, likely embedding conservatism based on early trends and recent methodology, with margin negatively impacted by expense timing.
Leverage
Leverage of 2.9x remains above their target.
TransUnion (TRU) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$17.86B
Dividend Yield0.5%
Average Volume (3M)2.18M
Price to Earnings (P/E)49.0
Beta (1Y)1.93
Revenue Growth8.85%
EPS GrowthN/A
CountryUS
Employees13,000
SectorIndustrials
Sector Strength85
IndustryConsulting Services
Share Statistics
EPS (TTM)1.05
Shares Outstanding195,140,440
10 Day Avg. Volume2,482,321
30 Day Avg. Volume2,175,563
Financial Highlights & Ratios
PEG Ratio-1.33
Price to Book (P/B)2.62
Price to Sales (P/S)0.00
P/FCF Ratio-10.92K
Enterprise Value/Market Cap0.90
Enterprise Value/Revenue0.97
Enterprise Value/Gross Profit6.29
Enterprise Value/Ebitda3.56
Forecast
1Y Price Target
$107.30Price Target Upside15.70% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering12
TransUnion Business Overview & Revenue Model
Company DescriptionTransUnion (TRU) is a global information and insights company that operates in the financial services sector. It provides credit information and analytics to consumers and businesses, empowering them to make informed decisions. TransUnion's core offerings include credit reports, risk management solutions, and decision-making analytics that are used by financial institutions, insurance companies, and various other industries to assess creditworthiness and manage risk.
How the Company Makes MoneyTransUnion generates revenue primarily through the sale of its credit information and risk management solutions to businesses and consumers. The company earns money by providing credit reports and analytics to financial institutions, which use these products to evaluate the credit risk of potential borrowers and manage existing credit portfolios. Additionally, TransUnion offers identity protection and credit monitoring services directly to consumers who subscribe to these services for a fee. The company also collaborates with various partners to offer integrated solutions that enhance its data and analytics capabilities, contributing to its earnings. Revenue streams are diversified across different sectors, including financial services, insurance, and healthcare, where its solutions help in decision-making and risk assessment.
TransUnion Earnings Call Summary
Earnings Call Date:Apr 24, 2025
(Q1-2025)
| % Change Since: 20.21%|
Next Earnings Date:Jul 24, 2025
Earnings Call Sentiment Positive
TransUnion reported strong revenue growth and strategic progress, particularly in its U.S. Market and international segments. Despite some challenges in specific segments such as Consumer Interactive and Public Sector, the company's transformation initiatives and improved capital allocation are positive indicators. The overall outlook remains cautious due to economic uncertainties.Q1-2025 Updates
Positive Updates
Record Revenue Growth
TransUnion delivered high single-digit organic revenue growth and double-digit adjusted diluted EPS growth for the fifth consecutive quarter, with revenue growing 8% on an organic constant currency basis.
Strong U.S. Market Performance
The U.S. Market segment delivered 9% growth, with financial services growing 15%. Consumer lending and auto both grew double digits, while card and banking grew mid-single digits.
Successful Strategic Initiatives
TransUnion made key leadership additions and progressed on its technology modernization with the OneTrue platform, achieving over 50% faster processing speeds and a 20% to 50% increase in developer productivity.
International Growth
International revenue grew 6% on a constant currency basis, with the UK delivering strong 9% growth. The company expects India to reaccelerate to 10% growth for the full year.
Improved Capital Allocation
The leverage ratio declined to 2.9x from 3.5x a year ago, and the company repurchased shares for the first time since 2017, anticipating further capital deployment flexibility.
Negative Updates
Challenges in Consumer Interactive Segment
The Consumer Interactive segment declined 1% as anticipated, with plans to launch a new freemium solution later in the year.
Mortgage Inquiry Decline
Mortgage inquiries were down roughly 10%, although revenue grew 27% due to favorable pricing.
Public Sector Revenue Decline
Public Sector revenue declined modestly year-over-year due to strong growth lapping from the previous year.
One-Time Transformation Charges
The company took $30 million in one-time charges related to its transformation program.
Company Guidance
During the TransUnion 2025 First Quarter Earnings Conference Call, the company provided guidance with several key metrics and insights into its performance and outlook. TransUnion reported an 8% organic constant currency revenue growth for the first quarter, surpassing its 5% to 6% guidance, and achieved double-digit adjusted diluted EPS growth. The U.S. Market segment grew by 9%, with financial services growing 15%, excluding mortgage growth at 9%. International markets grew by 6%, with the UK showing strong 9% plus growth. The company maintained its full-year organic growth guidance, anticipating revenue between $4.358 billion and $4.417 billion, with adjusted EBITDA between $1.549 billion and $1.590 billion. Adjusted EBITDA margin is expected to be between 35.6% and 36%. TransUnion's leverage ratio improved to 2.9 times from 3.5 times a year ago, and the company repurchased 10 million shares for the first time since 2017. Despite maintaining the guidance, TransUnion acknowledged market uncertainties, including potential impacts from U.S. fiscal policy changes, tariffs, and global economic conditions.TransUnion Financial Statement Overview
Summary
TransUnion shows strong financial performance with solid revenue growth and healthy profitability margins. The balance sheet reflects moderate leverage, and cash flow is robust despite a slight decline in free cash flow growth. Overall, the company is financially sound, with good cash conversion and manageable debt levels.Income Statement
TransUnion's TTM (Trailing-Twelve-Months) revenue growth rate is solid, reflecting a positive trajectory with a 1.78% increase from the previous annual period. The gross profit margin stands robustly at 70.22%, indicating strong cost management in relation to revenue. The net profit margin improved significantly over the past year to 10.66%, suggesting enhanced profitability. EBIT and EBITDA margins are healthy at 17.94% and 28.06%, respectively, highlighting efficient operations. Overall, the income statement shows a well-managed and profitable business with consistent revenue and profit growth.82
Very Positive
Balance Sheet
The balance sheet reflects a stable financial position, with a debt-to-equity ratio of 1.17, indicating moderate leverage compared to equity. The return on equity (ROE) improved to 10.35%, showcasing effective utilization of shareholder funds to generate profit. The equity ratio is reasonable at 40.06%, suggesting a balanced approach between debt and equity financing. While leverage is manageable, the company should remain cautious of debt levels to ensure long-term financial health.75
Positive
Cash Flow
TransUnion's cash flow statement reveals a strong operating cash flow to net income ratio of 1.81, indicating efficient cash conversion from earnings. The free cash flow to net income ratio is solid at 1.10, reflecting effective cash generation relative to profits. However, free cash flow growth has been negative at -3.16% compared to the previous annual period, highlighting a slight decline in cash generation. Overall, the cash flow position remains strong, with effective cash management, though attention to free cash flow growth is warranted.78
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 4.26B | 4.18B | 3.83B | 3.71B | 2.96B | 2.53B |
| Gross Profit | 2.55B | 2.51B | 2.31B | 2.32B | 1.94B | 1.68B |
| EBITDA | 1.31B | 1.20B | 667.30M | 1.13B | 995.20M | 862.50M |
| Net Income | 367.30M | 284.40M | -206.20M | 266.30M | 1.39B | 343.20M |
Balance Sheet | ||||||
| Total Assets | 10.95B | 10.98B | 11.11B | 11.67B | 12.63B | 7.31B |
| Cash, Cash Equivalents and Short-Term Investments | 612.50M | 682.00M | 478.90M | 585.30M | 1.84B | 493.00M |
| Total Debt | 5.20B | 5.21B | 5.45B | 5.67B | 6.37B | 3.45B |
| Total Liabilities | 6.46B | 6.67B | 7.00B | 7.40B | 8.63B | 4.68B |
| Stockholders Equity | 4.39B | 4.22B | 4.01B | 4.17B | 3.91B | 2.54B |
Cash Flow | ||||||
| Free Cash Flow | 500.40M | 516.70M | 334.70M | -1.00M | 584.10M | 573.30M |
| Operating Cash Flow | 822.20M | 832.50M | 645.40M | 297.20M | 808.30M | 787.40M |
| Investing Cash Flow | -331.60M | -307.40M | -318.90M | -723.90M | -2.21B | -267.20M |
| Financing Cash Flow | -309.20M | -308.70M | -438.80M | -820.50M | 2.76B | -296.90M |
TransUnion Technical Analysis
Positive
92.74
Price Trends
86.79
Positive
85.45
Positive
92.45
Positive
Market Momentum
1.54
Negative
64.89
Neutral
83.78
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TRU, the sentiment is Positive. The current price of 92.74 is above the 20-day moving average (MA) of 87.99, above the 50-day MA of 86.79, and above the 200-day MA of 92.45, indicating a bullish trend. The MACD of 1.54 indicates Negative momentum. The RSI at 64.89 is Neutral, neither overbought nor oversold. The STOCH value of 83.78 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TRU.
TransUnion Risk Analysis
TransUnion disclosed 39 risk factors in its most recent earnings report. TransUnion reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
TransUnion Peers Comparison
Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Performance Comparison
TRU
TransUnion
92.74
16.77
22.07%
EFX
Equifax
264.16
25.42
10.65%
VRSK
Verisk Analytics
302.54
28.76
10.50%
TransUnion Corporate Events
Shareholder Meetings
TransUnion Holds Annual Stockholders Meeting, Votes on Key Proposals
Neutral
May 9, 2025
On May 7, 2025, TransUnion held its Annual Meeting of Stockholders, where key proposals were voted on, including the election of ten directors for a one-year term, the ratification of PricewaterhouseCoopers LLP as the independent accounting firm for 2025, and an advisory vote on executive compensation. The outcomes of these votes, which were in favor of the proposals, reflect the company’s ongoing governance practices and stakeholder engagement.
Business Operations and StrategyFinancial Disclosures
TransUnion Reports Strong Q1 2025 Financial Results
Positive
Apr 24, 2025
On April 24, 2025, TransUnion announced its financial results for the first quarter of 2025, reporting a total revenue of $1,096 million, which marks a 7% increase from the previous year. The company exceeded its financial guidance across all key metrics, with significant growth in U.S. Financial Services and Emerging Verticals. Despite challenging market conditions, TransUnion maintained its revenue growth guidance for 2025 and highlighted its ability to navigate potential economic downturns through a diversified portfolio and strategic cost management.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.