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TransUnion (TRU) Stock Declines 5.9% on Q4 Earnings Miss

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TransUnion TRU reported disappointing fourth-quarter 2021 results, with earnings and revenues missing the Zacks Consensus Estimate.

The stock declined 5.9% since the earnings release on Feb 22 in response to lower-than-expected results as well as weak guidance for the first quarter of 2022 and full-year 2022.

Adjusted earnings for first-quarter 2022 are anticipated between 91 and 94 cents per share, lower than the current Zacks Consensus Estimate of 97 cents. Revenues are anticipated between $906 million and $914 million, lower than the current Zacks Consensus Estimate of $915.4 million. Adjusted earnings for 2022 are expected between $3.84 and $4.00 per share, lower than the consensus estimate of $4.12.

Adjusted earnings (excluding $4.45 from non-recurring items) of 81 cents per share missed the consensus mark by 10% but inched up 1.3% year over year. Total revenues of $789.8 million also missed the consensus mark and increased 13.1% year over year on a reported basis. The top line rose 21% on a constant-currency (cc) basis and 12% on an organic constant-currency basis.

TransUnion’s shares have inched up 1.1% in the past year against a 3.8% fall of the industry it belongs to.

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Revenues by Segments

U.S. Market revenues of $481 million were up 25% year over year on a reported basis and 11% on an organic basis. Within the segment, Financial Services revenues of $268 million rose 12% year over year. Emerging Vertical revenues, including Neustar, insurance and all other verticals, were $213 million, up 44% on a reported basis and 10% on an organic basis.

International revenues increased 15% year over year on a reported basis and 15% on a constant-currency basis, to $185 million. Revenues from Canada increased 8% on a reported basis and 5% at cc to $32 million. Revenues from the U.K. came in at $58 million, up 14% on a reported basis and 12% at cc. India revenues increased 33% on a reported basis and 35% at cc to $37 million. Asia-Pacific revenues came in at $16 million, up 5% on a reported basis and 6% at cc.

Revenues from Latin America increased 13% on a reported basis and 17% at cc to $26 million. Africa revenues were up 15% on a reported basis and 13% at cc to $15 million.

Consumer Interactive segment revenues rose 14% from the prior-year quarter’s figure to $144 million.

Operating Performance

Adjusted EBITDA was $282.4 million, up 14% year over year on a reported basis (up 14% at cc and 11% on an organic constant-currency basis). Adjusted EBITDA margin came in at 35.8%, down 210 basis points year over year.

Balance Sheet and Cash Flow

TransUnion had $1,842 million in cash and cash equivalents at the end of the quarter compared with $709 million at the end of the prior quarter. Long-term debt was $6.25 billion compared with $3.4 billion reported in the prior quarter. The company generated $148 million in cash from operating activities and CapEx was $66.1 million. TransUnion paid out $18.3 million in dividends in the quarter.

Outlook

Adjusted EBITDA in first-quarter 2022 is anticipated between $330 million and $337 million.

TransUnion Price, Consensus and EPS Surprise

TransUnion Price, Consensus and EPS Surprise
TransUnion Price, Consensus and EPS Surprise

TransUnion price-consensus-eps-surprise-chart | TransUnion Quote

For 2022, the company expects revenues between $3.752 billion and $3.810 billion. The midpoint ($3.781 billion) is higher than the Zacks Consensus Estimate of $3.77 billion. Adjusted EBITDA is anticipated between $1.386 billion and $1.424 billion.

Currently, TransUnion carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.

Sectorial Snapshot

Robert Half International RHI reported impressive third-quarter 2021 results, with earnings and revenues beating the Zacks Consensus Estimate. Quarterly earnings of $1.53 per share beat the consensus mark by 9.3% and soared 100% year over year.

Revenues of $1.71 billion surpassed the consensus mark by 4% and increased 44% year over year on a reported basis and 43% on an as-adjusted basis. RHI currently sports a Zacks Rank #1.

Automatic Data Processing ADP recently reported better-than-expected second-quarter fiscal 2022 results. Adjusted earnings per share of $1.65 beat the Zacks Consensus Estimate by 1.2% and rose 9% year over year.

Total revenues of $4.03 billion beat the consensus mark by 1.1% and rose 9% year over year. ADP currently carries a Zacks Rank #2 (Buy).

Rollins ROL reported mixed fourth-quarter 2021 results, with earnings meeting the Zacks Consensus Estimate and revenues beating the same. Adjusted earnings of 14 cents per share met the Zacks Consensus Estimate and increased 7.7% year over year.

Revenues of $600.3 million beat the consensus mark by 3.3% and rose 11.9% year over year. ROL currently carries a Zacks Rank #2.


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