Market News

Thomson Reuters Stock (TSE:TRI) Falls Despite Q3-2022 Earnings Beat; Cash Flow a Concern

Story Highlights

Thomson Reuters reported its Q3-2022 results, and while the results weren’t bad, investors sold off the stock. Still, it’s a solid, profitable company that analysts are bullish on.

Thomson Reuters (TSE: TRI) (NYSE: TRI), a media company that provides news and business information services to professionals, recently reported its Q3-2022 financial results, which missed revenue expectations but beat earnings-per-share (EPS) expectations. Please note that the following figures are in U.S. dollars. TRI’s revenue reached $1.574 billion, which slightly missed expectations by $20 million but represented a 3% growth rate. 

Meanwhile, adjusted earnings per share were $0.57, up 24% year-over-year, beating estimates calling for $0.49 per share. Additionally, the company’s adjusted EBITDA margin was 34% compared to 30% last year, and its operating profit grew 41%, reaching $398 million.

However, Thomson Reuters’ free cash flow came in at $386 million for the quarter, only growing by 2%. The company bought back $855 million worth of shares from June 8, 2022, to October 28.

Thomson Reuters kept its guidance steady for 2022 and 2023. For 2022, it expects revenue growth of 6%, an adjusted EBITDA margin of 35%, and free cash flow of about $1.3 billion. For the full-year 2023, TRI anticipates revenue growth of 5.5% – 6.0% and an adjusted EBITDA margin between the 39% – 40% range. Free cash flow is forecast to be between $1.9 billion – $2.0 billion, partially due to lower capital expenditures as a percentage of revenue.

Is Thomson Reuters Stock a Good Buy, According to Analysts?

According to analysts, TRI stock comes in as a Moderate Buy based on three Buys and two Holds assigned in the past three months. The average TRI stock price target of $116.48 implies 13.26% upside potential.

Conclusion: TRI’s Results Were Good, but Investors Expected More

While TRI’s results were not bad at all — revenue and earnings grew, and the company maintained its guidance — investors were expecting more, as the stock finished the day 3.24% lower. Nonetheless, analysts are cautiously optimistic, giving the stock a decent amount of upside potential.

Disclosure

Tired of arriving late to the Big Returns Party?​
Most investors don’t have major gainers like TSLA or NVDA on their radar from the start.
The profusion of opinions on social media and financial blogs makes it impossible to distinguish between real growth potential and pure hype.
​​For the past decade, we have developed and perfected technology designed to help private investors, just like you, find the best opportunities, with the greatest upside potential, in any financial climate.​
Learn More