S ince its
initial public offering
on June 25, credit reporting agency TransUnion has moved full
speed ahead to assure that it stays on the right growth
That trajectory encompasses several growth areas forTransUnion
), which provides risk and information services to businesses and
Businesses use its information services for a number of
functions, including acquiring new customers, assessing a
consumer's ability to pay for services, measuring and managing
debt portfolio risk, collecting debt and verifying consumer
Consumers use its services to view their credit profiles and
access analytical tools that help them understand and manage
their personal information and take precautions against identity
Different Take On Data
TransUnion has identified three areas of growth, says Curt
Miller, the company's senior vice president of global strategy
The primary drivers are new product development and growth in
emerging businesses and geographic markets, he says. The company
also continues efforts to boost its core business in such markets
as financial services.
One such product is CreditVision, which TransUnion launched in
2013 and which has been gaining momentum ever since.
"CreditVision is an example of a different way of looking at
the same credit bureau data," Miller told IBD.
Here's why: A traditional credit report is a snapshot in time
of a consumer's credit, he says. In contrast, CreditVision looks
at the trends that happened to the consumer over time, before the
snapshot, to indicate risk level.
TransUnion is expanding CreditVision in the U.S., thanks
partly to a deal with mortgage giantFannie Mae (
) to provide its trended consumer credit data in the assessment
of mortgage applicants.
During the middle of next year, Fannie Mae will require
lenders to used "trended" credit data when underwriting
single-family borrowers through its automated underwriting
That's where TransUnion comes in. Fannie Mae will integrate
trended views from TransUnion's CreditVision product offering
into mortgage application assessments, starting in the middle of
Reporting bureauEquifax (
) will also provide trended data to Fannie Mae starting in
mid-2016, Fannie Mae said in a press release.
Stifel analyst Shlomo Rosenbaum says that TransUnion is the
only company offering the kind of real-time trended data that
"We understand that (Equifax) is investing to improve its
trended data product to be ready for that mid-2016 deadline, and
that (rival Experian) does not have a product in that area yet to
speak of," Rosenbaum noted in a report.
TransUnion is the last of the Big Three global credit
reporting bureaus to go public. Equifax has been trading on the
NYSE for a long time, and Experian trades on the London Stock
TransUnion priced its IPO at 22.50, opened at 24.62 and closed
the day at 25.40. The stock has since traded in a tight range and
currently trades near 26.
"People need to get more familiarity," Rosenbaum said. "When
they see it puts up good numbers and good growth, you will see
more investors getting behind the story. It seems like they've
built a good flywheel for strong growth."
TransUnion's third-quarter numbers were pretty decent. Revenue
rose 15% from a year earlier to $389.1 million, well about
consensus analyst estimates. Earnings came in at 27 cents a
share, according to Thomson Reuters -- 1 cent below views.
"We experienced robust demand from business customers and
consumers for core and new products across our markets," CEO Jim
Peck said on a Q3 conference call.
Among TransUnion's strengths during the quarter was its
CreditVision business, which saw revenue more than double during
Analysts polled by Thomson Reuters expect TransUnion's
full-year earnings to rise 24% in 2016 and another 12% in
New products should help fuel that growth.
"We continue to innovate around CreditVision," Miller
For example, TransUnion in October released CreditVision Link,
which combines alternative data with trended credit bureau data
to help score even more of the population that can't normally be
CreditVision Link's alternative data assets include property,
tax and deed records, checking/debit accounts and payday lending
information. These alternative data sources have proven to
accurately score more than 90% of applicants whom traditional
models would otherwise return as no-hit or thin-file.
TransUnion also has taken CreditVision internationally to
Canada and Hong Kong, and it has plans to continue expansion into
more foreign markets.
An example of an emerging business segment is in health care,
where TransUnion provides hospitals with several solutions. Its
products have helped more than 1,000 hospitals and thousands of
physician partners identify over $5 billion in uncompensated care
revenue, Miller says.
As part of its initiatives in its core business, TransUnion is
taking steps to get closer to its customers, he says. These steps
include bringing on sales professionals and consultants who have
experience and backgrounds working for TransUnion's
"This gives them the ability to see what customers' problems
are and partner with customers to solve their problems," said
TransUnion is a part of IBD's Financial Services-Specialty
industry group. It has an 86 IBD Composite Rating out of a
possible 99. The group also includesCBOE Holdings (
), which has a 96 IBD Composite Rating.