CoreLogic ( CLGX ) delivered the coveted "triple play" in Q1: a positive earnings surprise, a positive revenue surprise, and a significant increase in consensus estimates from analysts.
It is a Zacks Rank #1 (Strong Buy) stock.
The company reported solid double-digit revenue growth while greatly expanding profit margins. This led to a huge increase in net income year-over-year.
CoreLogic is a global property information, analytics and data-enabled services provider. The company generates the majority of its revenues from clients with operations in the U.S. residential real estate, mortgage origination and mortgage servicing markets. The volume of U.S. mortgage loan originations serve as a key market driver for more than half of its business.
The company reports its results in two segments: Data & Analytics and Technology & Processing Solutions. Its D&A segment owns or licenses data assets including loan information, criminal and eviction records, employment verification, property sales and characteristic information, property risk and replacement cost, and information on mortgage-backed securities. Its TPS segment provides property tax monitoring, flood zone certification and monitoring, credit services, mortgage loan administration and production services, lending solutions, mortgage-related business process outsourcing, technology solutions and compliance-related services.
First Quarter Results
CoreLogic delivered better-than-expected first quarter results on April 22. Adjusted earnings per share (but including stock-based compensation expense) was $0.40, crushing the Zacks Consensus Estimate by 54%. It was a 264% increase over the same quarter last year.
Revenue rose 12% to $365 million, beating the consensus of $355 million. This was driven by 19% growth in Data and Analytics (including 7% organic growth), which accounted for 45% of total revenues. Technology & Processing Solutions (the other 55%) saw top-line growth of 6%.
CoreLogic delivered strong margin expansion in the quarter too due to a favorable business mix and continued cost management. The company also leveraged its selling, general and administrative expenses.
Following the strong Q1 beat, analysts revised their estimates significantly higher CoreLogic. This sent the stock to a Zacks Rank #1 (Strong Buy).
The 2015 Zacks Consensus Estimate is currently $1.68, up from $1.38 just 30 days ago. The 2016 consensus is now $1.92, up from $1.70 over the same period. Based on the consensus estimates, analysts are projecting 45% adjusted earnings growth this year and 15% next year.
Shares of CoreLogic have soared since the strong Q1 report. While the stock doesn't look cheap around 26x 12-month forward earnings, it does sport a strong free cash flow yield near 9%.
The Bottom Line
With strong earnings momentum, solid top-line growth and expanding profit margins, CoreLogic is well-positioned to continue running higher over the next several weeks.
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