What happened

Shares of TransUnion (NYSE:TRU), a risk and information solutions provider that provides data and credit analytics for consumers and businesses, surged as much as 10% after reporting its fourth-quarter and full-year earnings results before the opening bell.

So what

For the fourth quarter, TransUnion reported a total revenue increase of 13% to $436 million, with acquisitions accounting for only 3% of the sales increase. In other words, organic growth accounted for 10% of sales growth. U.S. information services revenue rose 15% to $268 million, led by a 16% improvement in online data service sales, while international revenue rose 24%. Perhaps the only disappointment was the consumer interactive operating segment (the operating arm that provides consumer credit reports and credit monitoring), which reported flat sales of $97 million.

Accountant reviewing figures.

Image source: Getty Images.

In terms of profit, TransUnion reported $0.44 in adjusted EPS, a 45% increase from Q4 2015, as its adjusted EBITDA margin came in at 38.8%, a full 340 basis points higher than the prior-year quarter. Comparatively, Wall Street had been expecting only $427.3 million in sales and $0.36 in adjusted EPS, meaning TransUnion topped estimates by nearly $8 million in sales and $0.08 in EPS.

Looking ahead, the company's guidance also impressed Wall Street. For the first quarter, TransUnion offered a forecast of $440 million to $445 million in sales and $0.38 to $0.39 in EPS, which compares favorably with the current consensus of $441.7 million in sales and $0.35 in EPS. For the full year, TransUnion's guidance of $1.835 billion to $1.85 billion in sales, and $1.71 to $1.76 in EPS, is nicely above Wall Street's consensus of $1.83 billion in revenue and $1.58 in EPS.

As icing on the cake, TransUnion announced a $300 million share-repurchase plan over the next three years. Repurchasing its common stock can lower the number of shares outstanding, thus boosting EPS and potentially making TransUnion even more fundamentally attractive.

Woman holding a credit card and reviewing information on her laptop.

Image source: Getty Images.

Now what

The real standout of this report wasn't that TransUnion topped Wall Street's expectations – it was that the company generated double-digit organic sales growth. The company's investments in innovation and its technology platform to deliver risk analytics to businesses and consumers is obviously paying off in a big way, which is further evidenced by its better-than-expected guidance.

What's more, don't sweep under the rug the balance-sheet improvements TransUnion made last month. The company wound up amending its credit agreement and pushing its maturity date out two additional years to 2023, while also netting "a 25-basis-point reduction in the applicable margin and a reduction in the LIBOR floor to zero from 75 basis points." Even with $2.4 billion in debt and net leverage of 3.4, TransUnion's balance sheet is quite healthy.

TransUnion's current valuation pegs the company at roughly 22 times this year's expected profits at the midpoint, which would suggest minimal upside. However, with TransUnion delivering double-digit organic sales growth and only beginning to recognize the sales growth from its new technology platform, modest upside may still be possible. 

Sean Williams has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.