TransUnion (TRU) Hits 52-Week High On Solid Growth Dynamics
Zacks Investment Research | Nov 19, 2017 09:02PM ET
Shares of data and analytics solutions provider, TransUnion (NYSE:TRU) scaled a new 52-week high of $55.75 in Friday’s trading session, before closing a tad lower at $55.29 for a solid year-to-date return of 78.8%. Barring minor hiccups, the company’s share price has steadily been on an uptrend since mid-September. This Zacks Rank #2 (Buy) stock has the potential for further price appreciation with long-term earnings growth expectations of 10%.
Growth Drivers
TransUnion has an attractive business model with highly recurring and diversified revenue streams, significant operating leverage, low capital requirements and strong and stable cash flow. The inherent nature and significance of its solutions in customers’ decision-making endow it with high customer retention and revenue visibility. Impressively, it deals with the 10 largest U.S. banks, top five credit card issuers, the biggest 25 auto lenders and thousands of healthcare providers and federal, state and local government agencies. Also, the company makes significant investments to modernize its infrastructure and facilitate the seamless transition to the latest Big Data and analytics technologies. This enables TransUnion to expand its business and improve cost structure.
The company’s gigantic treasure trove of data is its most distinguishing asset and is perhaps the biggest barrier to entry for competitors. TransUnion has more than 30 petabytes of data, growing at an average of above 25% annually since 2010. Acquiring or building such data involves huge costs, making it extremely difficult for a new company to build the contacts and data that TransUnion already has. This fortifies its ability to sustain its competitive advantage and protect its market share.
TransUnion Price and Consensus
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