Two 59%+ winners, four above 25% in Aug – How this AI model keeps picking winners
Investing.com - RBC Capital has reiterated an Outperform rating on TransUnion (NYSE:TRU) with a price target of $121.00, citing potential for the company to exceed current market expectations. According to InvestingPro data, analyst targets range from $84 to $130, with TransUnion currently trading slightly below its Fair Value.
The firm expects TransUnion’s U.S. Financial Services segment, excluding mortgage, to maintain robust mid-to-high single-digit growth in the second quarter of 2025, following 9% growth in the first quarter. This outlook is supported by stable growth trends, easier year-over-year comparisons, and resilience despite concerns about potential slowdowns in consumer spending. The company’s impressive 59.78% gross profit margin and strong revenue growth of 8.85% in the last twelve months support this positive outlook.
RBC Capital believes there is upside potential to the anticipated mid-single-digit decline in mortgage inquiries, which could further support the projected 20%+ mortgage revenue growth for TransUnion. The company’s emerging verticals, particularly the Insurance segment, are expected to maintain double-digit growth rates.
Geographic performance is expected to vary, with India’s growth projected to improve from 1% in the first quarter to mid-single digits in the second quarter, setting up for double-digit growth in the third quarter of 2025. Growth in the UK and Canada may moderate slightly to mid-single digits due to tariff concerns but should remain above industry averages.
While TransUnion has guided for a margin decline in the second quarter due to the timing of investments, RBC Capital anticipates margin expansion in the second half of 2025 as this timing effect reverses, potentially supporting overall financial performance. InvestingPro analysis reveals strong financial health metrics, with liquid assets exceeding short-term obligations and a solid Altman Z-Score of 6.13. For deeper insights into TransUnion’s financial health and growth prospects, access the comprehensive Pro Research Report available on InvestingPro.
In other recent news, TransUnion reported impressive Q1 2025 earnings, exceeding market expectations with an earnings per share (EPS) of $1.05, surpassing the projected $0.98. The company also posted revenues of $1.1 billion, beating forecasts of $1.07 billion, demonstrating robust growth in its diversified portfolio. Morgan Stanley (NYSE:MS) analysts adjusted their price target for TransUnion to $120 from $127, maintaining an Overweight rating, citing strong fundamentals and growth prospects despite potential macroeconomic challenges. Additionally, TransUnion’s shareholders approved all board proposals during the company’s Annual Meeting, including the election of ten directors and the appointment of PricewaterhouseCoopers LLP as the independent accounting firm. The company declared a quarterly cash dividend of $0.115 per share, reflecting its commitment to delivering shareholder value. Meanwhile, Fair Isaac (NYSE:FICO) Corporation faced concerns over potential changes in the mortgage credit scoring landscape, driven by comments from the Federal Housing Finance Agency regarding possible shifts from tri-merge to bi-merge credit scores. RBC Capital’s analyst maintains a positive outlook on Fair Isaac, despite regulatory risks, emphasizing the company’s pricing power and industry standard status. These developments highlight the evolving dynamics in the credit reporting and analytics sector.
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