TransUnion (NYSE:TRU) Q3 2020 Earnings Prep

in EARNINGS/INVESTING IDEAS by

TransUnion (NYSE:TRU) is scheduled to report Q3 earnings results on October 27, 2020.

The company is expected to report earnings of $0.76/share on revenue of $680.9 million. The consensus earnings per share (EPS) of $0.76/share is based on a poll of 15 analysts and represents a growth in eps of 0% over the same quarter last year, when the company reported the same result.

The revenue forecast of $680.9 million based on a poll of 13 analysts implies a year-over-year (YoY) decline in revenue of −1.2%. Last year the company reported $689.3 million in revenue for the quarter.

Expected to report EPS contraction of −0.3% for Q3, 2020
Metric Expected Prior Year YoY Change
Revenue $680.87 $689.30 −1.2%
EPS $0.76 $0.76 −0.3%

Earnings Call Trends

Management has been great at managing analyst expectations historically. The company has a perfect record over the last 8 tracked quarters of exceeding earnings guidance.

What are your expectations from TransUnion for earnings this quarter? Let us know in the comments!

Analyst Expected vs. Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2020 $0.50 $0.66 31.4% Beat
Q1, 2020 $0.67 $0.73 8.3% Beat
Q4, 2019 $0.72 $0.75 4.9% Beat
Q3, 2019 $0.71 $0.76 7.3% Beat
Q2, 2019 $0.65 $0.69 5.5% Beat
Q1, 2019 $0.59 $0.60 2.0% Beat
Q4, 2018 $0.63 $0.66 4.5% Beat
Q3, 2018 $0.63 $0.65 3.7% Beat

In the following table, we summarize the company’s stock price movements after earnings releases. The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2020, the stock price reacted by increasing 3.2%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
July 28, 2020 $89.39 $92.25 3.2% Increase
April 28, 2020 $75.06 $81.14 8.1% Increase
February 18, 2020 $98.13 $100.31 2.2% Increase
October 22, 2019 $82.62 $83.66 1.3% Increase

The other question to consider is one of earnings manipulation. There is a lot of pressure on management each quarter to deliver on earnings expectations. The Beneish M-Score is a statistical model that provides some insight into whether the company might be manipulating earnings. With a Beneish M-Score of −2.95, the model suggests that the company is not likely to be an earnings manipulator. A value of −2.95 implies a 0.2% chance of earnings manipulation.

Fundamentals And Technical Analysis

TransUnion is currently trading at $85.25/share, up 0.6% for the day. The company is trading at approximately 84.3% of its 52-week high of $101.16/share. The company’s stock price is down −7.6% since the last earnings report and down −4.7% over the previous week.

The company’s 14 Day Relative Price Index (RSI) of 46.39 suggests the company is trading in technically neutral territory. The RSI is considered overbought when above 70 and oversold when below 30.


NYSE:TRU Stock Price Chart
Source: Finbox

The current share price implies a price-to-earnings (P/E) multiple of 51.74 and a forward P/E multiple of 28.81.

TransUnion’s current share price also implies a price-to-book (P/B) multiple of 7.58. The following table summarizes some other key fundamental ratios:

Data as of October 21, 2020
Metric Value
Last Reported Fiscal Period Key FY2020.Q2
Period End Date June 30, 2020
Stock Price (Current) $85.25
P/E Ratio 51.7x
P/E Ratio (Fwd) 28.8x
PEG Ratio −12.9
Total Debt / Total Capital 19.0%
Levered Free Cash Flow $657 million
EV / EBITDA 19.9x

Finbox

TransUnion is a large-cap stock with a market capitalization of $16.206 billion and a total enterprise value of $19.624 billion. The company operates in the Industrials sector and the Professional Services industry.

TransUnion provides risk and information solutions. The company operates in three segments: U.S. Markets, International, and Consumer Interactive. The U.S. Markets segment provides consumer reports, actionable insights, and analytics, such as credit and other scores, as well as decisioning services for businesses. These businesses use its services to acquire new customers; assess consumer ability to pay for services; identify cross-selling opportunities; measure and manage debt portfolio risk; collect debt; verify consumer identities; and investigate potential fraud. This segment serves various verticals, including financial services, insurance, healthcare, collections, tenant and employment, public sector, media, and other markets. The International segment offers credit reports, analytics, decision services, and other value-added risk management services; and consumer services, which enable consumers to manage their personal finances. This segment serves customers in financial services, retail credit, insurance, automotive, collections, public sector, and communications industries through direct and indirect channels. The Consumer Interactive segment provides credit reports and scores, credit monitoring, fraud protection and resolution, and financial management solutions that enable consumers to manage their personal finances and take precautions against identity theft. This segment offers its products through online and mobile interfaces, as well as through direct and indirect channels. The company serves customers in approximately 30 countries and territories, including North America, Latin America, Europe, Africa, the Asia Pacific, and India. The company was formerly known as TransUnion Holding Company, Inc. and changed its name to TransUnion in March 2015. TransUnion was founded in 1968 and is headquartered in Chicago, Illinois.

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