TransUnion (TRU): A Bull Case Theory

We came across a bullish thesis on TransUnion (TRU) on Substack by LongTermValue Research. In this article, we will summarize the bulls’ thesis on TRU. TransUnion (TRU)'s share was trading at $85.73 as of April 2^nd. TRU’s trailing and forward P/E were 59.12 and 20.33 respectively according to Yahoo Finance.

With growing concerns of an impending U.S. recession, compiling a list of high-quality companies that have declined over 15% from their 30-day highs offers a timely investment approach. These companies typically possess monopoly-like qualities and strong pricing power, making them resilient in economic downturns. One such opportunity is TransUnion (TRU), a leading credit reporting agency with an enterprise value of $20.6 billion and a market cap of $16.1 billion. As part of the credit reporting triopoly alongside Experian and Equifax, TransUnion plays a critical role in providing consumer credit reports and risk assessment services, which lenders use to determine creditworthiness.

Currently trading at 19% below its 30-day high and 34% off its all-time high, TRU appears undervalued. It trades at a significant discount to Equifax and Experian on a P/E basis, with projected earnings multiples of 20x for 2025 and 16.9x for 2026. The company’s PEG ratio of ~0.9x, coupled with an expected 19% EPS growth in 2026, further enhances its investment appeal. A recent acquisition has also improved its earnings growth trajectory, making the stock optically more attractive. If TransUnion re-rates to a ~25x P/E, it presents a compelling opportunity with an estimated 50% upside from current levels.

TransUnion (TRU) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 58 hedge fund portfolios held TRU at the end of the fourth quarter which was 42 in the previous quarter. While we acknowledge the risk and potential of TRU as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than TRU but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.