TransUnion (TRU) delivered strong second-quarter results as the global information and insights company benefited from the economic recovery. Earnings and revenue growth came on the back of increased demand for the company’s services in most markets.
Revenue for the quarter was up 22% year-over-year to $774 million, beating the consensus estimate of $745.8 million. Adjusted net income rose to $185 million ($0.96 a share) from $127 million ($0.66 a share) reported in the same quarter last year and beat analysts’ estimates of $0.91 a share.
TransUnion benefited from a diversified growth-oriented portfolio. The company has raised its full-year outlook in response to the strong performance in Q2. (See TransUnion stock charts on TipRanks)
“Looking forward, we expect to continue to see market improvements in the second half of 2021 and we expect our organic growth to continue to outperform our underlying markets,” said CEO Chris Cartwright.
TransUnion is projecting revenue of between $766 million and $777 million for Q3 and adjusted earnings of between $0.91 and $0.93 per share. For the full year, revenues are expected between $3.03 billion and $3.06 billion with adjusted EPS of between $3.63 and $3.70.
Yesterday, Needham analyst Kyle Peterson reiterated a Hold rating on the stock, insisting that the growth outlook is already priced into the shares, which sets up a neutral risk-reward scenario.
Peterson stated, “We are positive on the improving growth across the key US markets and international business segments despite NT headwinds in the mortgage market. Although we view TRU as a leading provider of financial data that is well positioned to benefit as pandemic restrictions ease, we view the risk reward as neutral with the shares trading at an EV/FY22 EBITDA multiple of 19x.”
Consensus among analysts is a Strong Buy based on 9 Buys and 1 Hold. The average TransUnion price target of $124.11 implies 4.98% upside potential to current levels.
TRU scores a 9 out of 10 on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.
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