TransUnion Earnings: Low Expectations and Solid Results Drive Positive Market Reaction

Wide-moat-rated TransUnion’s results were decent, and we attribute the positive stock reaction to overly negative sentiment heading into earnings. Organic constant-currency revenue growth was 8.3% in the first quarter of 2024, ahead of the firm’s guidance of 3%-4% and the 5.4% of the fourth quarter. TransUnion’s stock dropped after Equifax reported last week, even though much of Equifax’s disappointment came from its workforce solutions segment. Adjusted EBITDA margins of 35.1%, were up from 34.3% in the year-ago period and were healthy in our view. TransUnion raised its 2024 revenue and earnings outlook. Our 2024 estimates were previously ahead of the firm’s outlook but are now within their updated ranges. We will maintain our $100 fair value estimate for TransUnion and regard shares as undervalued.