Wide-moat TransUnion finished 2022 with a fourth quarter that was a bit soft. Revenue and adjusted earnings came in modestly below the firm’s midpoint guidance and consensus expectations, but the firm’s initial 2023 operating outlook was mostly in line with consensus expectations. As we update our model, we do not expect to materially change our fair value estimate of $98 per share on TransUnion’s shares and regard shares as undervalued. We believe that the market is overly concerned about a recession and believe recession risk is adequately priced in. We believe that TransUnion’s business model has many positive attributes, that some recent weakness is more idiosyncratic rather than macro-related, and that even in a recession TransUnion can produce organic constant currency revenue growth.
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