TransUnion TRU had an impressive run in the past six months. The company’s shares have gained 26.8% compared with its industry and the Zacks S&P 500 composite’s growth of 14% and 11.2%, respectively.

Six Months Price Performance

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TRU’s revenues are expected to rise 8.8% year over year in 2024 and 7.9% in 2025. Its earnings are estimated to increase 16% in 2024 and 16.9% in 2025.

TransUnion’s Positive Earnings Surprise

TRU delivered a decent earnings surprise in the trailing four quarters. The company delivered a trailing four-quarter average earnings surprise of 7.3%, which outpaced the Zacks Consensus Estimate.

TRU’s Northward Estimate Revisions

Ten estimates for 2024 have moved north in the past 60 days against no southward revision, reflecting analysts’ confidence in the company. The Zacks Consensus Estimate for 2024 earnings has increased from $3.88 per share to $3.91 in the same time.

Insurance Growth Strengthens TransUnion’s Top Line

The continuous growth in the insurance segment over the past few quarters is driven by a strong market trend. Insurers continue to increase marketing activity as rate adequacy enhances, driving demand for TRU’s credit-based marketing solutions and its suite of identity-based data hygiene, analytics solutions and audience.

Stable Economic and Lending Circumstances Aid TransUnion

The United States continues to witness solid economic and lending conditions. The finances of households remain healthy as a result of low unemployment and an increase in real wages, even though lower-income customers face affordability pressures from higher shelter, transportation, and other expenses. Consumer delinquencies have lowered for personal loans and seem to be stabilizing for credit cards and auto loans. Overall, such an environment promotes TransUnion’s financial services revenue growth.

TRU’s Promising Consumer Interactive Segment

The company witnessed a slight decline in this segment in the second quarter of 2024, while it recorded a 21% exponential rise in the third quarter. The recent breach remediation wins have driven this segment's growth. TransUnion’s cross-functional teams executed these contracts well, helping consumers and building its credibility in this space. This segment benefits from a broadened value proposition and go-to-market strategy in direct-to-consumer.

TRU’s Raised 2024 Guidance

For 2024, TransUnion hiked its guided range for revenues to $4.16-$4.18 billion from the preceding quarter’s view of $4.10-$4.14 billion. The midpoint ($4.17 billion) of the company’s revised revenue guidance is in line with the Zacks Consensus Estimate. TRU raised its adjusted earnings per share outlook to $3.87-$3.93 from $3.78-$3.90 in the preceding quarter. The midpoint ($3.90) of the company’s new guided range is marginally higher than the Zacks Consensus Estimate for earnings of $3.89 per share. Adjusted EBITDA is now expected to be in the range of $1.48-$1.5 billion compared with $1.46-$1.49 billion anticipated in the previous quarter.

TransUnion’s Zacks Rank & Stocks to Consider

TRU carries a Zacks Rank #3 (Hold) at present.

Investors interested in the Zacks Business Services sector may look at some better-ranked stocks like Accolade ACCD, Amadeus IT Group AMADY and Affirm AFRM, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Accolade has a long-term earnings growth expectation of 11.4%. APP delivered a trailing four-quarter earnings surprise of 27.2%, on average.

Amadeus IT Group has a long-term earnings growth expectation of 8.6%. AMADY delivered a trailing four-quarter earnings surprise of 7%, on average.

Affirm has a long-term earnings growth expectation of 37%. AFRM delivered a trailing four-quarter earnings surprise of 17.8%, on average.

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