Shares of TransUnion (TRU +0.73%) plunged 33.1% this week, according to data provided by S&P Global Market Intelligence, after the consumer credit reporting agency announced weak third-quarter results and lowered its annual outlook.
NYSE: TRU
Key Data Points
Some bright spots in TransUnion's weak third quarter
TransUnion's third-quarter 2023 revenue grew 3.3% year over year to $968.7 million, translating to adjusted (non-GAAP) earnings of $177 million, or $0.91 per share (down from $0.93 per share a year earlier). Analysts, on average, were expecting higher adjusted earnings of $0.94 per share on revenue of $982.6 million.
TransUnion CEO Chris Cartwright insisted the company "executed well against weakening lending and marketing activity over the course of the quarter," noting that its U.S. markets segment continued to grow thanks to high-single-digit gains at Neustar. International segment revenue also increased in the double-digit percent range, with solid growth in India, Canada, and the Asia-Pacific region.
What's next for TransUnion Stock?
Even so, TransUnion followed by lowering its full-year outlook to account for moderating growth expectations in both the U.S. and the United Kingdom. For the full-year 2023, TransUnion now sees revenue ranging from $3.794 billion to $3.809 billion (up 2% to 3% year over year), with adjusted net income per share of $3.24 to $3.28. TransUnion's previous guidance called for full-year revenue growth of 3% to 5%, with adjusted earnings per share of $3.49 to $3.62.
At first glance, this modest guidance reduction wouldn't seem to merit a steep 30%+ drop for TransUnion stock. But the market obviously hates that the company is at the mercy of today's difficult macroeconomic environment. Until we see more signs of an improvement to that end, I expect TransUnion stock will almost certainly remain under pressure.
