TransUnion Earnings: Solid Second Quarter, Breach Wins, and Lack of Negatives Drive Market Reaction

TransUnion reported a solid second quarter. We attribute the positive market reaction to decent results and outlook amid a not-too-demanding valuation. TransUnion now expects 2024 revenue of $4.098 billion-$4.138 billion, up 1.6% at the midpoint from its previous range. Importantly, TransUnion is only raising its outlook because of strong second-quarter results and a recent breach remediation win, which we suspect is related to the widely publicized breach at AT&T. Following the sharp negative reaction to the firm’s third-quarter 2023 earnings, we believe the company wants to take a conservative stance and note that the firm’s outlook does not incorporate any rate cuts. Overall, we will maintain our wide moat rating and $100 fair value estimate on TransUnion’s shares. We continue to view the risk/reward profile on TransUnion's shares as attractive.